Currently my friend has 5-6 loans for medical school in the 6.8% to 7.9% interest rate. The loans are of type Stafford, Unstafford, Plus, and a few others.

I looked at http://www.staffordloan.com/repayment/consolidation.php to investigate consolidation of these loans in order to achieve a lower interest rate (6.8%+ is terrible).

Please advise me on the best way to lower the interest rate on these loans.

2 Answers 2


Several student loans are backed by government guarantee and this will allow you to get attractive rates. This may require them to consolidate the three classes of loans separately. Many commercial banks offer consolidation services, one example is Wachovia discussed at https://www.wellsfargo.com/student/private-loan-consolidation/

Other methods of "consolidation" are of course anything that pays off the original loan. If available, using a parent's home equity line of credit to pay of the loans and then paying back the parents can save money. An additional benefit of HELOC-style loans is that they are very flexible in their payment terms. For example you may pay $25 per year to keep the account open and then only be required to make interest payments.




Actually, a few lenders now will offer a consolidation loan that will consolidate both Federal and private student loans. One example is Cedar Ed, http://cedaredlending.com/PrivateConsolidationLoan.htm

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