Which is better?

Do the auto payment and take of advantage of as many discounts you can. It could really add up if you have a large amount of student debt. You would also save on the postage it would take to mail in your payment.

If your interest rate is reduced, you will either pay of the loan sooner, or your payments will be reduced. In either case, your total payments will be less under your current arrangement. Unless they charge a fee to set up the automatic payments, you come out ahead.

Yes, absolutely worth it if the payment is the same and has the same timing (i.e., every month, etc). They are essentially giving you a discount to make sure you never miss a payment.

That being said, make sure you are setting up an automatic payment, NOT direct debit. I never recommend giving anyone direct debit authorization into your account. If you ever decide to change your bank account or something goes wrong, it takes forever to correct. It basically allows the institution to go directly into your funds and take it out themselves.

If you are sure you will always have enough to meet the auto payment that is the way to go. You receive a discount for the steady payments.

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Get as many discounts as you can! Personally I like auto payments since I don't have even think about it.

As long as there are no extra fees, then it's a great deal dropping you rate down to about 3.66% Just make sure there isn't anything hidden in the arrangement.

if you can get an even lower interest rate - without hidden charges, sounds like a great deal, especially if the principle of your loan is high.

Good luck