The power of compound interest at work behind a student loan consolidation rate is incredibly powerful. Even Einstein was fascinated by how this tiny, seemingly insignificant percentage could pack such a powerful punch. Einstein created the rule of 72 referring to compound interest, calling it the "greatest mathematical discovery of all time."
Just decreasing the student loan consolidation rate by a small percentage can make an enormous difference in the amount of interest you will pay on your loan. For example, after repaying a $30,000 loan over a 10 year period with a student loan consolidation rate of 6.5%, you would have paid $10,877 in interest. Shave just 1 and a half percentage points off of the student loan consolidation rate and the total interest paid is reduced to $8,183.
Extend the repayment period out to 15 years and the gap between the two repayment rates nearly doubles. Using Einstein's rule of 72, when you divide the number 72 by the amount of interest you are paying on your debt, the result will be the number of years it will take to double if you don't make any payments.
Lender percentage interest rate reduction incentives
Many lenders offer student loan consolidation rates that are very comparable to each other. The real difference is in the interest rate reduction incentives offered by different companies. Two types of lender incentives that can greatly impact the student loan consolidation rate are on-time payments, and direct withdraw.
ScholarPoint has researched the competition in the market and has made a conscious decision to offer higher than average interest rate reduction incentives. By simply making payments on time through auto debit, something most people do anyway, borrowers can reduce their student loan consolidation rate by 1.5%. Secure a low student loan consolidation rate today by applying online or learn more by calling or real-time chatting with a loan specialist.
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