Pay off federal student loans with a private loan?

[GatorGuy]

Does anyone here know if this is possible? Looking around it looks like if you have federal student loans that they want you to get a federal consolidation loan to pay them off.

I am trying to pay off some of my wife's 7.9% loans over the next year and I would like to get a lower interest rate (~3%) loan now, even if it is a variable interest rate because it would save me thousands in interest in this one year alone. I obviously know it isn't recommended to pay off a fixed rate loan with a variable rate but in this case the savings would be substantial.

[HoldingOntoHope]

Besides the variable rate the other consideration is that there are far fewer or no considerations in payment arrangements for private loans. Federal loans have at least some provisions for payment deferrals, lowering payments or loan forgiveness for public service jobs. Have you looked into the rate for a consolidation of the federal loans?

[thom02099]

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@GatorGuy wrote:

Does anyone here know if this is possible? Looking around it looks like if you have federal student loans that they want you to get a federal consolidation loan to pay them off.

I am trying to pay off some of my wife's 7.9% loans over the next year and I would like to get a lower interest rate (~3%) loan now, even if it is a variable interest rate because it would save me thousands in interest in this one year alone. I obviously know it isn't recommended to pay off a fixed rate loan with a variable rate but in this case the savings would be substantial.

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I think you'd get more advice if we knew more about the numbers you're talking about.  What's the total amount of the current student loan at 7.9%?   What are the terms, what sort of salary do you and your wife have as a way to determine how much you can afford to pay? Who currently holds the loan and who are you looking to go with for a possible variable rate?  More info will give a better idea of what could be the optimum scenario for you.  Could be that what you've got now is the best option and not to change it....or not.   

[GatorGuy]

I have looked into federal consolidation loans but they do not give you a lower interest rate. They just combine your amount and then give you a weighted interest rate. Completely pointless for saving money.

I have $50k in 7.9% interest loans that I would want to consolidate to a lower rate. In a few minutes of looking today I saw that Wells Fargo had their variable rate consonlidation loans as low as 3%. The loans are in my name and I make $325k.

[thom02099]

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@GatorGuy wrote:

I have looked into federal consolidation loans but they do not give you a lower interest rate. They just combine your amount and then give you a weighted interest rate. Completely pointless for saving money.

I have $50k in 7.9% interest loans that I would want to consolidate to a lower rate. In a few minutes of looking today I saw that Wells Fargo had their variable rate consonlidation loans as low as 3%. The loans are in my name and I make $325k.

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That's certainly an attractive rate from WF!  I have a credit card and mortgage with WF and they are very easy to work with; I've also had no issues with their customer service.  Depending on the length of both loans, unless they are open ended, it sounds to me like a good deal.  And you certainly have the income to support the loan application, if your scores are there to accomplish this.  Do you have any sort of personal timetable established as to how soon you'd want to get the $50K loan paid off?