Graduated Learning: Life after College

I got my degree, I got a job…now what?

My student loan interest rate dropped! Hooray! January 9, 2008

Filed under: Personal Finance — Stephanie @ 10:13 am
Tags: , , , , ,

I had read a post over at FiLife.com about why student loan interest rates aren’t dropping nearly as quickly or as often as the savings account interest rates are dropping. They said that many student loan companies have set their contracts to change variable rates at certain times and based on certain values and averages. For the company I’m borrowing from, they reset their interest rates every quarter. They’ve lowered my interest rate from 8.25% to 7.5%. I was worried that they had taken away my .25% rate reduction that they had given me for automatic deductions. I called them up and they said that they did. So, I guess that’s that.

So, check out your loans! Your rates might have been lowered!

(Yes, I know that since it’s based on variable rates that it could also go up. But for as long as I’ve been actively paying my loans (since I graduated) they’ve been at a stupidly high 8.25%. So things feel better now)

One thing to note is that if you are automatically having money deducted from your bank account, they might start taking less out…because with less interest charged, they wouldn’t get as much money from you, so by lowering your monthly payment, they’ll have you paying slower at the lower interest rate. So, keep that in mind if you’re trying to pay down your loans faster than they want you to (like I want to do).

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3 Responses to “My student loan interest rate dropped! Hooray!”

  1. Ari Weinberg Says:

    I checked with Citi. If you enable automatic payments, they actually keep the payments at the original schedule. So, if you don’t mind paying the same amount you had been paying, you will end up paying your loan down faster because the lower rate means more goes to principal.

    And I would doubt that they would remove your 25 bp cut for auto withdrawals. It should be baked in.

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