My interest rate on my student loans is fixed at 3.25%. Is that a good rate?

[ah32]

I consolidated my student loans years ago. I'm in the process of rehabbing them after going into default. I've made 5 payments and received a letter today stating they will no longer take my tax refund. Yay! Only 4 more payments to go! It is 9 payments, right? Not 10? Anyway, I'm wondering if 3.25% is a good interest rate given today's low interest rates. Thanks for any info!

[ah32]

Looks like the current interest rate for Direct Subsidized and Unsubsidized Loans (Undergraduates) is 4.66%. At least I have that going for me!

[Luscher]

yes thats pretty good considering I have some at over 6%

[SCF]

Rehab takes a minimum of 9 payments to complete.  But, you should keep in contact with the CA and monitor when your loans are transferred to your new servicer.  You may have to make a 10th payment depending on the timing, or if there is some kind of delay.

I doubt very seriously you could refinance your loans for less than 3.25%.  Personal loans for people with good credit are generally in the 6-10% range, and substantially higher for people with lower scores.  Private student loans are sometimes lower than that, but then the rate is often variable and subject to increase.

[ah32]

If my student loan was locked in at 3.25% before I defaulted, will it be the same after rehab? I've also read that the ridiculous collection fees go away after the loan is picked up by a new servicer. Is that correct? Thanks!

[SCF]

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@ah32 wrote:

If my student loan was locked in at 3.25% before I defaulted, will it be the same after rehab? I've also read that the ridiculous collection fees go away after the loan is picked up by a new servicer. Is that correct? Thanks!

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Yes, the terms of your original loan agreement (including the interest rate) apply after you finish rehab, and the collection fees will be removed.

[ah32]

Just made my 9th payment! TG told me that my loan may be picked up by the end of next week because I made my payment early. Very excited! So, my collection fees will be removed? If so, that's fantastic! My collection fees are hovering around $7700! Thanks for the info.

[ah32]

It's finally done! I've rehabbed my student loan and AES picked it up. I was able to log in right away and see my loans. I'm concerned that my interest rate is now 3.5, not 3.25 and it doesn't seem like any of the fees were removed. I thought that by rehabbing I avoided some of the collection costs?

It's no wonder we have a student loan crisis and people are choosing to stay in default. People's loan amounts are increasing exponentially from the inital loan!

[Luscher]

Not sure about your question but 3.5% is amazing, ill trade you! lol

[ah32]

Yep, my student loan is not at 3.5 and I know I was locked in at 3.25 before the rehab. I plan to call tomorrow to find out why!