The one financial thing I have ever done right in my life: 1.75% interest on my student loans: almost interest free student loans

When I graduated with my Bachelors of Science in Electronics Engineering back in 2003, the student loan rates were decent. So I sought out advice of a financial guru friend who told me to consolidate my loans for a better rate, but to make sure that I do it at the end of my grace period BEFORE repayment starts in. I followed that advice and consolidated my 45,000 dollars of student loans in the last 2 weeks of my grace period.

If I had not done that I would have been stuck paying 6.8% interest. But since I consolidated at the best point possible in time, I got it consolidated at a fixed 3%. But listen, it gets better. With the automatic withdraw system for payment they knock off another .25% bringing it down to 2.75%.

Not bad huh, but it gets even better, since I have made more than 36 on time payments (DUH, it’s automatic withdraw), they give a 1.00% bonus reduction, bringing my interest rate down to 1.75%.

So for now, I have stretched my payment terms out as long as possible, giving me as much leeway as I can to use my current cash to pay the higher interest rate bills. At 1.75% it is not free money by any means, but let’s face it… 1.75% is pretty much unheard of. Plus that interest is still tax deductible.

Check it out, I copied this from my account (one is subsidized and one isn’t):

Loan 1:

Loan 2: