How to Reduce Your Interest Rate on Your Consolidated Student Loan

Consolidated student loans offer a longer payment term and a locked interest rate. Once you have consolidated federal student loans, you are unable to refinance them and reduce the interest rate, although your lender may offer a discount after you have a history of on time payments. However, if you have private consolidated loans, you may be able to find a lower interest rate by shopping for a new lender.

Instructions

1

Contact your lender and ask for interest rate deduction. Some student loan companies may be willing to reduce your interest rate in order to keep your account. Your account will need to be in good standing in order to qualify for a reduced interest rate.

2

Search for a better interest rate. Call your bank and see if they offer student consolidation loans. Check online banks that are reputable, and contact your local credit union to see if you qualify for a loan through them.

3

Consider other types of loans to get a lower interest rate. For example, you may be able to find a lower interest rate on a home equity loan or on a consolidation loan offered through a traditional bank.

4

Apply for the loan with the best interest rate. There may be an application fee since you are dealing with private lenders instead of the federal government.