You can consolidate federal student loans now at a 7.25 percent interest rate but that number may be misleading.
* Some lenders will take 0.25 percent-0,35 percent off the 7.25 percent rate for borrowers who agree to have monthly payments taken automatically from a bank account.
* In addition, some lenders will reduce the interest rate by as much 1.25 percent after a borrower makes 30 consecutive on-time payments.
Therefore, consolidating at the current 7.25 percent rate may mean actually paying less than 6 percent in a few years. Various lenders offer different deals so it pays to shop around.
Recently passed federal legislation has ended the requirement that graduates who borrowed from one lender must consolidate with that lender. Now, borrowers can go to any lender, seeking the most desirable terms.
