You need not be finance-savvy to realize that you can save a substantial sum of money with lower interest rate on your student loan consolidation loans. By applying the knowledge of basic math, you can work out how much you can save with every 1/8th or 1/10th % reduction in the interest rate. A Penny saved is a Penny earned. Likewise, any amount of money saved, be it small or substantial, can make a significant difference to students. Therefore, it is very important for you to look out for the lowest Student Loan Consolidation Rate.
Essentially speaking, fixed and variable rate are two types of rates for Student Loan Consolidation Comparison. Few of the Loan Consolidation Companies may offer a combination of rates with certain percentage as fixed component and rest of the component as a variable component. Get more info on bad credit student loans without cosigner: Click here
In fixed rate loan, as the name suggests, you will pay the interest at the same rate during the tenure of the loan. Rates for fixed rate loan depend upon the overall economic indicators of any nation. Inflation is the primary factor that has a direct bearing to Student Loan Consolidation Rate. You must read the fine prints in the loan agreement, as during certain specific conditions, banks reserve the right to modify the interest rates. Defaults in loan repayments falls under such specific conditions.
Rates of variable rate loans change as per the prevailing economic conditions. Interest rates of variable rate loans are directly proportional to the interest rates in the economy. Higher the prime rate, higher the Student Loan Consolidation Rate and vice versa. Student Loan Consolidation Companies may follow different benchmark rates like LIBOR (London Inter-bank Offer rate) dollar rates or Prime interest rates. Make sure to understand this aspect very clearly, if you have decided to go for variable Student Loan Consolidation Rate.
Choice of fixed vs variable can vary with the current economic conditions of your country. Ultimately, you will decide what type of loan is suitable for you.