FinAid | Loans | Consolidation Loan Discounts

Consolidation Loan Discounts

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The following is a list of lenders that provide Consolidation Loans. It includes a basic comparison chart that highlights the loan discounts offered by each lender. Only consolidators that offer loan discounts are included in this list. More information about consolidation loans can be found in the consolidation loan and private consolidation loan sections of FinAid.

The lenders are listed in alphabetical order. No significance should be inferred from the order in which the lenders are listed.

Many lenders offer loan discounts to encourage borrowers to consolidate their loans with them. With the repeal of the single holder rule, borrowers now have a choice of consolidation lenders.

The most common loan discounts include a 0.25% interest rate reduction for having your monthly loan payments direct debited from your bank account and a 1% interest rate reduction after 36 months of on-time monthly payments for as long as you continue making on-time payments. (However, with the changes in lender subsidies introduced by College Cost Reduction and Access Act of 2007, many lenders are eliminating the 1% rate reduction after 36 months on new loans originated on or after October 1, 2007.)

Note, however, that if you are late with a single monthly payment or obtain a deferment or forbearance, you lose the interest rate reduction permanently. Less than 10% of borrowers succeed in obtaining the full benefit of an on-time payment discount. (Even borrowers who sign up for automatic direct debit of the monthly payments can miss a payment if they have insufficient funds in their account.)

We recommend focusing on the discounts that you can't lose, such as discounts for signing up for direct debit of the monthly payments. Next look for discounts that are more immediate in nature, such as those that offer a reduction in principal or a rebate of the loan fees. When a repayment incentive requires on-time payments, prefer those that involve a shorter time period before you can qualify for the discount. A discount that is suspended for a short time period after you are late with a payment is better than one that terminates after a single late payment.

Be sure to ask the lender whether there is a minimum balance to obtain the discounts. Often the discounts require a loan balance that is higher than the minimum balance required to consolidate. Also ask what is considered an "on-time" payment; usually this is within 10-15 days of the due date.

See Student Loan Discounts for other important caveats on the hidden gotchas of loan discount programs and tips on identifying the best loan discount programs.

Lender	Direct Debt (ACH/EFT) Discounts	On-time Payment Discounts	Other Discounts, Notes
Citi Student Loans	0.25% interest rate reduction		A $7,500 minimum loan balance is required.
Academic Financial Services (AFS)	0.25% interest rate reduction	1% interest rate reduction after 36 months	$7,500 minimum
Access Group	0.25% interest rate reduction	1% interest rate reduction after 36 months
AlaskAdvantage	0.25% interest rate reduction	1% interest rate reduction after 48 months	1% interest rate reduction for Alaska Presence Benefit (living or attending school in Alaska). $3,500 minimum
ALL Student Loan	0.25% interest rate reduction	No interest for first 12 months after 12 months or 1.25% interest rate reduction after 24 months ($10,000 minimum) or 1% interest rate reduction after 36 months ($25,000 minimum)	$10,000 minimum
Arizona Higher Education Loan Authority (AHELA)	0.25% interest rate reduction	1.0% interest rate reduction after 36 months.	$7,500 minimum balance. Prompt payment benefits lost if 60 days or more late.
Arkansas Student Loan Authority (ASLA)	0.25% interest rate reduction	1% interest rate reduction after 36 months	$7,500 minimum
Associated Bank	0.25% interest rate reduction	1% interest rate reduction after 36 months ($15,000 minimum)	$3,000 minimum
Bank of America	0.25% interest rate reduction	1% interest rate reduction after 36 months
College Foundation Inc.	0.25% interest rate reduction	0.5% interest rate reduction after 24 months, increasing to 1% after 36 months and 2% after 48 months
College Guidance Center	0.50% interest rate reduction ($60,000 minimum), 0.25% otherwise	1% interest rate reduction after 24 months ($60,000 minimum), otherwise a 1% interest rate reduction after 36 months. All benefits lock for the life of the loan.	3% cash rebate after first payment ($60,000 minimum)
Collegiate Funding Group	0.25% interest rate reduction	1% interest rate reduction after 36 months	15 day grace period for on-time payment.
Collegiate Funding Services, LLC (CFS)	0.25% interest rate reduction	1% interest rate reduction after 36 months
Collegiate Risk Management Inc. (CRM)	0.25% interest rate reduction	1% interest rate reduction after 36 months	$7,500 minimum
Comerica Bank	0.25% interest rate reduction
Connecticut Student Loan Foundation (CSLF)	0.25% interest rate reduction	2% principal reduction (based on original loan balance) after 24 months
Edamerica	0.25% interest rate reduction	1% interest rate reduction after 36 months	$7,500 minimum
EdFed	0.25% interest rate reduction	1% after 36 months ($20,000 minimum)
EduCare Financial	0.25% interest rate reduction	1% interest rate reduction after 36 months
Edfinancial Services	0.25% interest rate reduction	1% interest rate reduction after 36 months	$7,500 minimum
Education Services Foundation (ESF)	0.25% interest rate reduction	1.25% interest rate reduction after 36 months ($10,000 minimum)
Erie Processing Self Service Corporation		1.0% principal reduction after 1 month, 1.0% principal reduction after 2 months, 2.0% principal reduction after 3 months
Federal Association of Financial Services (FAFS)	0.25% interest rate reduction	1% interest rate reduction after 36 months	$7,500 minimum
Georgia Student Finance Commission (GSFC)	0.35% interest rate reduction
GradLoans.com	0.50% interest rate reduction ($40,000 minimum); 0.25% otherwise	1.0% interest rate reduction after 24 months ($40,000 minimum); 1.0% rate reduction after 36 months otherwise	$7,500
The Graduate Loan Center	0.25% interest rate reduction		$10,000 minimum
HERO Student Loans	0.25% interest rate reduction	1.0% interest rate reduction after 36 months ($20,000 minimum)	$10,000 minimum
Kentucky Higher Education Student Loan Corporation	0.25% interest rate reduction	1% interest rate reduction after 30 months
Key Education Resources	0.25% interest rate reduction
M & I Bank	0.25% interest rate reduction	1% interest rate reduction after 36 months
Massachusetts Educational Financing Authority (MEFA)	0.25% interest rate reduction	1% interest rate reduction after 36 months	$7,500 minimum
Michigan Advantage Consolidation Loan	0.25% interest rate reduction	1.0% interest rate reduction after 36 months	$7,500 minimum
National City Bank		Cash rebate of up to $1,000 based on consolidation loan balance after 6 months. (Rebate of $100 for $10,000 to $25,000; $300 for $25,001 to $40,000; $500 for $40,001 to $60,000; $750 for $60,001 to $100,000; and $1,000 for over $100,000.)	$10,000 minimum
National Student Loan Consolidation Corporation	0.25% interest rate reduction	1% interest rate reduction after 36 months
New Hampshire Higher Education Loan Corporation (NHHELCO)	0.50% interest rate reduction	$250 principal reduction after 12 months. On-time defined as within 10 days of the due date.	1% interest rate reduction after 0 months. $7,500 minimum balance.
New Mexico Student Loans	0.25% interest rate reduction		1.25% interest rate for teachers, doctors and nurses who work in New Mexico
NextGrad	0.25% interest rate reduction	1% interest rate reduction after 36 months
North Texas Higher Education Authority (NTHEA)	0.25% interest rate reduction	1% interest rate reduction after 36 months. Also $595 principal reductions after 12, 24 and 36 months ($15,000 minimum); $595 after 12 months ($10,000 minimum); $295 after 12 months (less than $10,000)	Account balance is forgiven when it is paid down to less than $600. $5,500 minimum to consolidate.
Oklahoma Student Loan Authority (OSLA)	0.33% interest rate reduction	1% principal reduction after 6 months
PNC Bank Education Loan Center	0.25% interest rate reduction	1% interest rate reduction after 36 months	$4,000 minimum
ScholarPoint Financial	0.5% interest rate reduction	1% interest rate reduction after 24 months
South Carolina Student Loan Corporation (SCSLC)	0.5% interest rate reduction	1% permanent interest rate reduction after 36 months. (Not lost once achieved.)	Graduation benefit of $250 (Associate's degree), $500 (Bachelor's degree) or $750 (Graduate/Professional degree) at the end of the loan for borrowers who stay on time and provide a copy of the degree. 15 day grace period.
Student Assistance Foundation (SAF)	0.25% interest rate reduction	1% interest rate reduction after 33 months instead of the principal reduction (minimum $22,500)	2.0% principal reduction (based on original loan balance)
Student Funding Group, LLC	0.25% interest rate reduction	5% principal reduction after 3 months	$50,000 minimum
Student Loan Funding	0.25% interest rate reduction ($7,500 minimum)	1% interest rate reduction after 36 months ($10,000 minimum)
Student Trust (ConsolidateYourLoans.com, AlumniConsolidation.com)	0.25% interest rate reduction	1% interest rate reduction after 36 months	$7,500 minimum
SunTrust Education Loans	0.25% interest rate reduction	1% interest rate reduction after 24 months	$10,000 minimum
University Financial Services	0.25% interest rate reduction	1% interest rate reduction after 24 months or 3% cash rebate after 3 months
U.S. Bank			$40,000 minimum
Vermont Student Assistance Corporation (VSAC)		1% interest rate reduction after 36 months (not available to law and medical school students/graduates)	0.75% annual principal reduction (available to law and medical school students/graduates)
VFI (Vista Financial Inc.)	0.25% interest rate reduction	1% interest rate reduction after 36 months	$10,000 minimum
Wachovia Education Finance (formerly Educaid)	0.25% interest rate reduction	1.0% interest rate reduction after 24 months	$15,000 minimum
Wyoming Student Loan Corporation	0.5% interest rate reduction		$100 principal reduction to members of the United States Military, including Reservists and members of the National Guard.