Are there any ways to save money through consolidation?
It can pay to shop around. Although federal law sets the rates on student loans, those rates are the maximum rates. Nothing prevents a lender from charging lower rates. Many lenders offer loan discounts for having your monthly loan payments direct debited from your bank account (e.g., 0.25% interest rate reduction). They may also offer an interest rate reduction for making on-time monthly payments (e.g., 1% interest rate reduction after 36 months of on-time payments for as long as you continue making on-time payments). Note, however, that if you are late with a single monthly payment, you lose the interest rate reduction permanently. Less than 10% of borrowers succeed in obtaining the full benefit of an on-time payment discount. (Even borrowers who sign up for automatic direct debit of the monthly payments can miss a payment if they have insufficient funds in their account.) We recommend focusing on the discounts that you can’t lose, such as discounts for signing up for direct debit of
