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Understanding Your In-Grace Discount

You Can Lower Your Rate by Taking Advantage of Time

Directory:  (links jump to content below)
Facts: what you need to know about your in-grace discount
understand the grace period
  lock-in your low in-grace rate
  avoid processing delays
  get the paperwork done early
  APPLY: start your application: it's FREE -- done in quick time
  email this page to a friend
  print this Student Consolidation summary booklet

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First: Understand the Grace Period

  • Your grace period begins on the date of school separation or graduation

    The grace period is a period of six (6) months where you will not have to make any payments on your loan

    At the end of 6 months, the grace period ends and your student loans enter repayment status — your first monthly payment will then come due.

  • The interest rate on your federal loans will increase by 0.6% once your loans come out of the grace period

    view the repayment table below to see how much more you can save each month by consolidating your student loans while you are in your grace period
Consolidated Loans without the In-Grace Discount
Loan Amount $15,000 $25,000 $40,000 $60,000
Your Current Estimated Monthly Payment $175 $292 $467 $701
Your Estimated Consolidated
Monthly Payment
$137 $198 $298 $409
Estimated Monthly Reduction $38 $94 $178 $292
Consolidated Loan with the In-Grace Discount
Loan Amount $15,000 $25,000 $40,000 $60,000
Your Current Estimated Monthly Payment $175 $292 $467 $701
Your Estimated In-Grace Consolidated
Monthly Payment
$132 $188 $273 $384
Estimated In-Grace Monthly Reduction $44 $104 $194 $317

Estimate your reduction with your
in-grace rate discount:

Total Loan Amt.
Current Payment
New Payment
download this monthly payment worksheet to run your own numbers: click here

Note: The chart is for example only. Your actual savings my differ. The numbers are estimated as follows:

Current Payment: uses a 7.14% interest rate under a standard 10 year repayment plan. This rate is for loans first disbursed between July 1, 1998 and June 30, 2006. Loans disbursed before this period have a slightly higher interest rate.

Consolidated Payment: calculated under the Federal Consolidation Program using an example of a 7.25% with extended repayment terms.

The In-Grace Consolidated Payment: calculated under the Federal Consolidation Program using the in-grace discount of 6.625% with extended repayment terms.

Note that extending the repayment period increases your total interest costs because you will be making smaller payments over a period of time. You can however prepay all or any portion of your outstanding balance without penalty reducing the total amount of interest paid over the life of the loan.


Second: Lock-In Your Low In-Grace Rate

  • You can lock-in the lower grace rate by consolidating your student loans while they are in grace

    Note that when you consolidate, your grace benefits will end — meaning that you will need to begin repayment

    The trick is to consolidate your federal loans 1-2 weeks before your grace period ends so that you can enjoy the grace benefits and at the same time, lock-in your lower rate


Third: Avoid Processing Delays

  • To meet the federal consolidation requirements, you must process and verify your application with a consolidation lender

    The time to complete this may vary from 2 or more weeks — depending on how fast your schools and loan servicers verify the information

    A good rule to follow is to consolidate your loans at least 30 days before your grace period ends — this ensures that you will meet the grace period deadline

Fact 4: Get the Paperwork Done Early

  • Your best security to meet the require deadline is to start your consolidation application as soon as you seperate or graduate from school

    Our consolidating partners will process your application, verify your loans, and then HOLD your application until 30 days before your grace period ends

    At that time, they will finalize your application to lock-in your lower grace rate and maintain your grace period benefits

    click here to begin your application
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