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. . . if you have variable-rate loans, right? If you missed the .8% deal with Direct Loans, there's no advantage to doing a consolidation now versus sometime in 2002.


The 3-month T-bill rate (represented by "IRX" on the Chicago Board of Options Exchange - I think you want to see Post #325), is now yielding about 2.25% (versus 3.69% in May 2001, when the rate for the July 2001 adjustment was made.)

If these kinds of low rates hold until late May 2002, the July 2002 adjustment will create an EVEN lower rate than 5.99% or 6.79%. (My guess is you get somewhere between 4.55% and 5.35% if the 3-month bill stays down through Spring.) That of course, is also an ideal rate to lock in, fixed-for-the-life, with a consolidation loan.

HOWEVER, if rates for some reason shoot way back up (inflationary panic or something), you have until midnight June 30, 2002 to lock in the current variable rate.

The idea here is it's better to wait, all else equal, to see which way the rate scenario will play out. I remember mentioning in earlier posts how 2001 was a good lock-in year, but there was the potential for other good rate years, too. Well, . . .

It's just unfortunate the ugly mess our country is in now, that this situation came to be.


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