Author Topic: Student Loan Refinance Options  (Read 386 times)

degrom7

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Student Loan Refinance Options
« on: January 15, 2019, 11:22:32 AM »
Hi. My wife was planning to apply for PSLF but it doesn't seem to make sense anymore. She has federal direct Stafford unsubsidized loans.

Her loan amounts are the following:
1) $4,970 @ 5.31%
2) $20,923 @ 5.84%
3) $22, 802 @ 6.21%
Total Principal - $48,695
Weighted Average Rate - 5.96%

She has 10 years to pay this off and with the interest, the total paid will be $64,756 ($16,061 of interest). She currently has to pay $525 a month.

Because the total that she'll pay will exceed the principal, PSLF won't make sense to us. We're thinking of refinancing the loan. I've seen places such as SoFI, Earnest, and the likes offering low interest rates. Is there any that someone recommends and should we go fixed or variable? Our household income is about $140k and our credit scores are 795 and 768. Thanks!

charis

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Re: Student Loan Refinance Options
« Reply #1 on: January 15, 2019, 11:58:13 AM »
Hi. My wife was planning to apply for PSLF but it doesn't seem to make sense anymore. She has federal direct Stafford unsubsidized loans.

Her loan amounts are the following:
1) $4,970 @ 5.31%
2) $20,923 @ 5.84%
3) $22, 802 @ 6.21%
Total Principal - $48,695
Weighted Average Rate - 5.96%

She has 10 years to pay this off and with the interest, the total paid will be $64,756 ($16,061 of interest). She currently has to pay $525 a month.

Because the total that she'll pay will exceed the principal, PSLF won't make sense to us. We're thinking of refinancing the loan. I've seen places such as SoFI, Earnest, and the likes offering low interest rates. Is there any that someone recommends and should we go fixed or variable? Our household income is about $140k and our credit scores are 795 and 768. Thanks!

That monthly loan payment sounds high.  Is 140K your gross income or AGI?  Are you maxing your tax-advantage space to get your AGI and income-based loan payment down as low as possible?  Also, if you filing your tax return MFS, does her income-based payment decrease at all?

degrom7

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Re: Student Loan Refinance Options
« Reply #2 on: January 15, 2019, 12:11:42 PM »
Hi. My wife was planning to apply for PSLF but it doesn't seem to make sense anymore. She has federal direct Stafford unsubsidized loans.

Her loan amounts are the following:
1) $4,970 @ 5.31%
2) $20,923 @ 5.84%
3) $22, 802 @ 6.21%
Total Principal - $48,695
Weighted Average Rate - 5.96%

She has 10 years to pay this off and with the interest, the total paid will be $64,756 ($16,061 of interest). She currently has to pay $525 a month.

Because the total that she'll pay will exceed the principal, PSLF won't make sense to us. We're thinking of refinancing the loan. I've seen places such as SoFI, Earnest, and the likes offering low interest rates. Is there any that someone recommends and should we go fixed or variable? Our household income is about $140k and our credit scores are 795 and 768. Thanks!

That monthly loan payment sounds high.  Is 140K your gross income or AGI?  Are you maxing your tax-advantage space to get your AGI and income-based loan payment down as low as possible?  Also, if you filing your tax return MFS, does her income-based payment decrease at all?

It's our gross. I will max out $44k this year (457,403b, and IRA). For 2018, we put in $35k towards retirement. We're filing married joint. She applied for an income based plan and the payment went up from $280 to $525 a month.


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therethere

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Re: Student Loan Refinance Options
« Reply #3 on: January 15, 2019, 12:19:15 PM »
Just do rate checks at all the vendors and choose the lowest offered rate with a monthly payment you can afford. Earnest offered me the best rates even checking over multiple years. It doesn't hurt to check rates every 1-2 years too. You can refinance with another vendor and score another signon bonus.

degrom7

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Re: Student Loan Refinance Options
« Reply #4 on: January 15, 2019, 12:28:16 PM »
Just do rate checks at all the vendors and choose the lowest offered rate with a monthly payment you can afford. Earnest offered me the best rates even checking over multiple years. It doesn't hurt to check rates every 1-2 years too. You can refinance with another vendor and score another signon bonus.
Thanks. What rates did you get? I just checked Sofi and the rates were almost the same as it is now. I'll check out Earnest.


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charis

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Re: Student Loan Refinance Options
« Reply #5 on: January 15, 2019, 12:30:13 PM »
Hi. My wife was planning to apply for PSLF but it doesn't seem to make sense anymore. She has federal direct Stafford unsubsidized loans.

Her loan amounts are the following:
1) $4,970 @ 5.31%
2) $20,923 @ 5.84%
3) $22, 802 @ 6.21%
Total Principal - $48,695
Weighted Average Rate - 5.96%

She has 10 years to pay this off and with the interest, the total paid will be $64,756 ($16,061 of interest). She currently has to pay $525 a month.

Because the total that she'll pay will exceed the principal, PSLF won't make sense to us. We're thinking of refinancing the loan. I've seen places such as SoFI, Earnest, and the likes offering low interest rates. Is there any that someone recommends and should we go fixed or variable? Our household income is about $140k and our credit scores are 795 and 768. Thanks!

That monthly loan payment sounds high.  Is 140K your gross income or AGI?  Are you maxing your tax-advantage space to get your AGI and income-based loan payment down as low as possible?  Also, if you filing your tax return MFS, does her income-based payment decrease at all?

It's our gross. I will max out $44k this year (457,403b, and IRA). For 2018, we put in $35k towards retirement. We're filing married joint. She applied for an income based plan and the payment went up from $280 to $525 a month.


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Hm, we filed MFJ with a similar gross (but max 2 401Ks, 2 tIRAs, a family HSA) and my I-B payment is almost half that with a higher loan balance.  You may want to look more closely at what is driving her payment up or considering filing MJS before refinancing.  The PSLF is a pain, so it  may not be a good idea regardless, since her balance is not unmanageable.

therethere

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Re: Student Loan Refinance Options
« Reply #6 on: January 15, 2019, 12:32:15 PM »
I've found Earnest is better rates if you have higher assets, whereas Sofi is more based on salary. Credible does an aggregate search and I've seen good rates from Citizen's Bank.

I've got mine at 3.25% and 3.85% fixed but they were refinanced early last year.

degrom7

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Re: Student Loan Refinance Options
« Reply #7 on: January 15, 2019, 12:33:42 PM »
I've found Earnest is better rates if you have higher assets, whereas Sofi is more based on salary. Credible does an aggregate search and I've seen good rates from Citizen's Bank.

I've got mine at 3.25% and 3.85% fixed but they were refinanced early last year.

Wow that is awesome. I will check those out. Thanks.


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degrom7

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Re: Student Loan Refinance Options
« Reply #8 on: January 15, 2019, 12:35:12 PM »
Hi. My wife was planning to apply for PSLF but it doesn't seem to make sense anymore. She has federal direct Stafford unsubsidized loans.

Her loan amounts are the following:
1) $4,970 @ 5.31%
2) $20,923 @ 5.84%
3) $22, 802 @ 6.21%
Total Principal - $48,695
Weighted Average Rate - 5.96%

She has 10 years to pay this off and with the interest, the total paid will be $64,756 ($16,061 of interest). She currently has to pay $525 a month.

Because the total that she'll pay will exceed the principal, PSLF won't make sense to us. We're thinking of refinancing the loan. I've seen places such as SoFI, Earnest, and the likes offering low interest rates. Is there any that someone recommends and should we go fixed or variable? Our household income is about $140k and our credit scores are 795 and 768. Thanks!

That monthly loan payment sounds high.  Is 140K your gross income or AGI?  Are you maxing your tax-advantage space to get your AGI and income-based loan payment down as low as possible?  Also, if you filing your tax return MFS, does her income-based payment decrease at all?

It's our gross. I will max out $44k this year (457,403b, and IRA). For 2018, we put in $35k towards retirement. We're filing married joint. She applied for an income based plan and the payment went up from $280 to $525 a month.


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Hm, we filed MFJ with a similar gross (but max 2 401Ks, 2 tIRAs, a family HSA) and my I-B payment is almost half that with a higher loan balance.  You may want to look more closely at what is driving her payment up or considering filing MJS before refinancing.  The PSLF is a pain, so it  may not be a good idea regardless, since her balance is not unmanageable.

We don't have a kid but will later this year. Does that affect anything? I'll look into why her payment is so high.


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