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I just paid off a loan I had with Sallie Mae using a home equity line of credit. The student loan was a variable rate that was based on the 90 day T-Bill rate plus 3.5%. The equity line is a variable rate that is prime minus 1/2 percent. Historically, the T-Bill rate and the prime rate have risen and fallen at the same rate, so I get a slightly lower rate and get to deduct all of the interest I pay.

(Writing the big check with borrowed money is like kissing your sister).

I would love to get a fixed rate, but I managed to save some money using the home equity line with no up front costs.

If you have home equity and variable student loans, you might want to try this.

I used Greater Atlantic Bank in Washington, D.C. Prime minus 1/2 is the best rate I could find.

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