Federal student loans will have different rates depending on type and disbursement dates. For example, rates for Stafford loan disbursed before July 1, 2006 will remain variable until consolidated.
* Currently, the interest rates for Federal loans disbursed before July 1, 2006 are at an all time low:
Stafford Loan (in school/grace period): 1.88%
Stafford Loan (in repayment): 2.48%
Federal PLUS loan: 3.28%
If you still have Federal loans at a variable interest rate now is the time to consolidate. When you consolidate Federal loans the interest rate is the weighted average of all your loans rounded up to the nearest 1/8 percent. This would result in final consolidation interest rates of:
Stafford Loan (in school/grace period): 2.0%
Stafford Loan (in repayment): 2.50%
Federal PLUS loan: 3.38%
Private Student Loan Consolidation Rates
Private student loan consolidation interest rates are variable, based on either the LIBOR (London Interbank Offered Rate) or the Prime rate, plus a margin for borrower and/or co-signer credit.
Origination fees can range between 1% and 5% depending upon your individual credit or the credit of a co-signer. Any fees that associated with the loan are capitalized (added to the loan) typically at the time repayment begins, which increases the amount borrowed but avoids any out-of-pocket expenses at loan closing.
