Student Loan Consolidation help

[starvingscientist]

I received notification that I am eligible for the Special Direct Consolidation program for some of my loans. It would mean an immediate 0.25% reduction in the interest rate (currently 6.8%) and an additional 0.25% reduction for using automatic debit.

I also received a separate notification that these same loans are eligible for a repayment incentive program. If I enroll, I would automatically receive a 3.7% reduction in the balance (not the interest rate!) and I would remain eligible for this deduction if I made 36 on time successive payments.

My question is, do you think Im eligible for both? Obviously, reducing the loans by 3.75% is a pretty good deal, but I might save more with a reduced interest rate. What do you think?

[isabel]

I guess that would depend how much you owe. What's the balance? You should be able to run some basic figures. Off hand, I'd guess that the reduction in what you owe would be more worthwhile, but that also depends how long it will take you to pay them off.

[starvingscientist]

Well, in total I owe 55k. But the loans that are eligible for the special consolidation or the borrower benefit options, total 18k.

The interest rate reduction would be about $42.50/ month over the next 9 years give or take (as the principle decreases, the interest will decrease). The balance reduction would be an outright $637.50 reduction of the total balance. Im thinking the interest rate reduction would be better.

[pugz]

I did the interest rate reduction, unfortunately only 1 of my 5 loans qualified (all were stafford loans, none private), but at least it was one of my bigger loans. Still I hate that I have payments going to so many different places each month. Having one payment for all would be great.