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Staci

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You might not have noticed, but at the end of April we added a toll-free phone number to the Student LoanDown blog: 1-877-412-5321.

In the age of social networking and Twitter  — which, BTW, Wells Fargo is using  — why would we include something as archaic as a phone number? After all, I'm the first to admit that I generally go out of my way to avoid making a phone call. If it's something I can solve by looking up the answer online or sending an email, that's the route for me.

But education financing can be complicated, frustrating, and even a bit emotional. And when you're trying to figure out how much to borrow for school — or if you should even borrow at all — sometimes it can help to talk things through with a real, live person. Our student loan specialists are here to help.

Of course, you can continue to comment on posts, or send us emails, or use our Ask the Expert tool. You have options!

Later this year we're going to give ourselves a bit of a facelift, and we're planning on adding some additional features, too. If you have suggestions for what you'd like to see, please send 'em our way!

Barbara

One of the questions we Student LoanDown bloggers get asked frequently (through comments and our Ask the Expert tool) is, "Can I lower my student loan interest rate?"

Some folks are looking to lower their monthly payment because they're not able to afford it — others are just looking to decrease the total interest paid to their lender. Here's the information I usually pass on to those readers.

When student loan borrowers sign their promissory note  agreeing to pay back the loan, they also agree to the interest rate detailed in the contract. For some loans this will be fixed and for others it will be variable (a margin that is added to a base rate). For federal student loans made after July 1, 2006, the interest rate is fixed. Most private student loans have variable interest rates.

Your promissory note locks in the terms on your loan (including the interest rate or rate margin). You can't "refinance" a student loan the way you can with other consumer credit products, but there are options to possibly lower your current monthly payment, reduce your interest rate, or reduce the amount you pay over the life of the loan.

Quick tangent: For those of you still in school or just beginning to take out student loans, be proactive. Understand what you're borrowing at what rate, so you don't find yourself unable to make payments later. End tangent.

Now, let's talk about the options.

Consolidate: By consolidating your student loans, you may end up reducing your current monthly payment because you are likely extending your repayment period. However, that means you would end up paying more over the life of the loan if you continue paying just the required amount each month. But if you're looking for a little payment relief now and are willing to pay more (or make higher payments later to avoid accruing additional interest), consolidation could be the answer. Your best bet for federal student loan consolidation is through the Department of Education's Direct Loan Program. 

An added benefit of private student loan consolidation is a possible interest rate change. If your credit situation has improved since you took out your loan (or if you bring on a cosigner), you may qualify for a better interest rate than you previously had.

Pay off the debt: Some borrowers could consider using a different consumer loan (personal, home equity, etc., depending on assets) to pay off their student loan. This option has a couple big things to consider, though. You would lose several benefits of student loans like deferment and forbearance options, as well as the potential tax deduction.

Pay more: If what you're looking to do is accrue less interest, then the best solution is to pay more money each month toward your principal balance. Even just a little bit each month could add up to big savings over the life of your loan.

Get the debt forgiven: There are some programs that will forgive a certain amount of a student's debt. For example, there is a federal loan forgiveness option available to students working in public service. 

Use borrower benefits: Ask you lender if they offer any benefits that could reduce your interest rate. For example, some lenders offer a discount if you make your payment automatically.

What other questions do you have about your student loans?

Barbara

We got an email via Ask The Expert recently with some great questions about credit. I thought all of you might benefit from a little credit Q&A as well, so here are some highlights of my response to the reader:

Q: Is it a good idea to get a credit report for myself? I have heard that requesting your own credit report decreases your score; I don't even know what my score is.
A: Anytime a person requests their own credit report or score (also known as a self-inquiry), neither is affected. You can request a credit report from each of the three credit reporting agencies (Experian , TransUnion  and Equifax ) annually free of charge . However, you'll have to pay for your credit score, which you can do at any of the previously mentioned credit reporting agencies. To find out where you stand currently, I'd recommend purchasing your score.

Q: I have one credit card that is two years old with a $3,000 limit that I don't use — have never used — what is this doing to my credit score?
A: This credit card that you don't use increases the available credit you have, so you're using less of your possible credit, which is a good thing. You've also had it opened for a while, so it may be helping your length of credit history. One thing you want to consider with this card is that because you don't use it as frequently, you might not catch any fraudulent activity as quickly.

Q: I have another credit that my mom thinks I should switch to a miles rewards card. Is switching the balance a good idea and what will it do to my credit score? Can I ask them to decrease my interest rate?
A: If you decided to switch the balance to a new card, you may have an inquiry by the credit card company that could affect your credit score. If you think that the rewards you'd get from a new card would be worth it, switching may work for you — be sure that you research all the terms of the new card before you make any changes. If you stick with your current card and are interested in lowering your rate, I'd say ask. If they say no, at least you tried!

We'd like to talk more with you about credit in some upcoming posts! What credit questions do you have?