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Student loans have the benefit of existing with an already low interest rate to attract students of all financial abilities. Unfortunately, the loans typically come with a given interest rate, and once consolidated, the new loan's rate will become a weighted average of all the loans combined. There's practically nothing you can do to change the "starting" rate of a student loan.

Good news, however. Many banks, as well as national lenders (i.e. Sallie Mae) offer rate incentive programs. For example, some banks will offer a .50% - 1.00% reduction in your rate if you consolidate more than $10,000 at their institution. Others will offer further reductions for signing up with automatic debit from your checking account.

It isn't uncommon to be able to knock off at least 1.00 percentage point off your loan with these programs, and with today's already low rates, that makes a difference in the $1,000's on saved interest costs. If you have ever studied the basics of finance, you know that even the slightest shifts in interest rate mean huge savings (or costs) over the 20-30 year term of a consolidated loan's life.

Contact your lending institution for more information, or shop around with other banks to see who has the best deals. It may well be worth it!

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