The Money Mustache Community
Learning, Sharing, and Teaching => Reader Recommendations => Topic started by: kpd905 on December 20, 2014, 03:14:21 PM
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I thought I'd provide a review of my experience refinancing my student loans with Sofi. I just did it last week and was pleased with their customer service and the ease of application.
What you need:
Scanned documents or screenshots of: loan billing statement, a recent paycheck, two forms of ID (driver's license and social security card worked for me)
Rates and Terms
You can choose either variable rate or fixed rate. The variable rates are lower for the same length of repayment term, but they do have the risk of increasing. However, they will tell you the maximum it can increase to.
For me, I refinanced my loans from a 6.55% rate with Great Lakes to 4.16% with Sofi. This 4.16% is a variable rate, but the maximum amount it can increase is up to 6.6%. So worse case scenario, I am back to square one. But I would still be saving almost $100/month on interest until that happens.
You can choose a 5, 10 or 15 year term. A five year term had the lowest rate, so I went with it. I plan to pay them off in about 1.5 years, and I'll save almost $1500 in that time with the lower rate. You also get a 0.25% rate drop for using autopay.
Currently their variable rates range from 2.66-5.035%, and their fixed rates range from 3.625-7.49%.
They will do a hard credit pull, and I believe the rate will be a result of both your credit score and income to loan ratio.
Just for data, my credit score was 775 when they pulled it, and my total amount of loans is currently 60% of my yearly salary.
Customer Service
I received two calls from their customer service about issues with the documents I gave them, and the issues were fixed within a few hours after I sent them a new document. (Don't use a .docx file, use PDFs or JPEGs) They also have a live chat feature on their site which is convenient for quick questions.
Bonus
Sign up through the MMM referral link and you'll get $300.
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I was also thrilled with my SoFi experience, as indicated in my signature. I just wanted to add to your review that they were great overcoming small obstacles that tend to trip up smaller companies. My law school registrar was slow to respond to them that I had in fact graduated. The SoFi rep just called me and asked if I had my diploma in my office. I did. He asked me to text him a cell phone pic of it. That was good enough! I was impressed.
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I've gone back and forth on SoFi. I'd like to keep my monthly payment as low as possible (in case of job loss or something), but also would like a lower interest rate. Their 15 year fixed at 5.625% is lower than my parent PLUS loan...but really I want the variable 3.17%. I guess worst case the variable goes up to 8.95 (their cap). That's more than the current 7.9% I pay but LIBOR isn't going to explode overnight right...? I'd also save tons in interest until the rate rises.
Any downside I'm overlooking? I have a 40K parent PLUS that I currently pay $275/month. That's the extended graduated plan. So my payment goes up every 2 years and the term is 25 years. SoFi's 15 year variable would be $279 at 3.170%.
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I would message them first and make sure that they will accept a Parent Plus loan. I don't have experience refinancing one of those.
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I chatted with someone and they said parent PLUS loans are eligible! Assuming this is true, I'm not seeing a huge downside. Worst case I hit Sofi's cap and have to pay $404 which is at least what I was planning to pay anyway.
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That is the experience I had as well, the maximum rate on the variable loan is about what my rate was in the first place, so not a big problem if it does shoot up.
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Just wanted to let you know I signed up today to refi using your link. I have about $23k in grad school loans at 6.55% and thinking with the 5 year variable I can get them down to ~3.75%. Thanks for posting about Sofi, I've never heard of them and hope this goes through soon!
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Just wanted to let you know I signed up today to refi using your link. I have about $23k in grad school loans at 6.55% and thinking with the 5 year variable I can get them down to ~3.75%. Thanks for posting about Sofi, I've never heard of them and hope this goes through soon!
Thanks a lot, and good luck, I hope you get approved.
Also I've found that Sofi is a pretty cool company. They are sending me free samples from some juice company they are affiliated with, as well as a free Sofi t-shirt.
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as well as a free Sofi t-shirt.
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The t-shirt is great!! It is so soft and I sleep in it all the time. They gave us a really cool wine bottle / beer bottle opener / swiss army knife contraption too. I was impressed that they sent these things after the deal was done instead of to entice people to sign up. Good luck "themessenger". I really hope you get approved with favorable terms!
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How are they at applying additional principal payments?
I'm currently using AES and would happily make the switch as they are not transparent on how payments are applied and prepay interest etc...
I'd like to make a switch to someone that is transparent on additional principal payments and getting a lower interest rate would be a nice perk. :)
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How are they at applying additional principal payments?
Looks like you are in luck. I just asked them via online chat:
Visitor
Can you tell me if additional payments are paid entirely to principal, or if they pay the loan ahead?
Samantha
Thanks for your question! Additional payments would be applied directly to principal. You would still need to make your minimum monthly payment every month.
Making additional payments will shorten the life of your loan, by paying off principal faster.
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Just wanted to let you know I signed up today to refi using your link. I have about $23k in grad school loans at 6.55% and thinking with the 5 year variable I can get them down to ~3.75%. Thanks for posting about Sofi, I've never heard of them and hope this goes through soon!
Thanks a lot, and good luck, I hope you get approved.
Also I've found that Sofi is a pretty cool company. They are sending me free samples from some juice company they are affiliated with, as well as a free Sofi t-shirt.
I got approved finally yesterday! Thanks on the info on the principal payments as well since our plan now is to have it all paid off by 1 year from today.
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I got approved finally yesterday! Thanks on the info on the principal payments as well since our plan now is to have it all paid off by 1 year from today.
Good stuff, what rate did you end up getting? Seems like the rates have dropped a bit in the last few weeks.
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I got approved finally yesterday! Thanks on the info on the principal payments as well since our plan now is to have it all paid off by 1 year from today.
Good stuff, what rate did you end up getting? Seems like the rates have dropped a bit in the last few weeks.
3.67% on a 5 year variable rate. Not bad at all!
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How are they at applying additional principal payments?
Looks like you are in luck. I just asked them via online chat:
Visitor
Can you tell me if additional payments are paid entirely to principal, or if they pay the loan ahead?
Samantha
Thanks for your question! Additional payments would be applied directly to principal. You would still need to make your minimum monthly payment every month.
Making additional payments will shorten the life of your loan, by paying off principal faster.
Perfect timing :) Thanks so much!
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Apparently Sofi doesn't lend in Nevada; anyone know a different company that might?
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ARS, this article shows a few of the most commonly used companies: https://studentloanhero.com/featured/5-banks-to-refinance-your-student-loans/
Looks like a lot of them are either limited to the type of degree you have, or be a graduate of certain schools. Citizen's bank looks like it is the least restrictive.
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Apparently Sofi doesn't lend in Nevada; anyone know a different company that might?
Darien Rowayton Bank lends in all 50 states. https://student.drbank.com/index.php
I have an application pending...
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How long did it take you guys to get approved?
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How long did it take you guys to get approved?
2 weeks max to get it approved and funded. But I also gave them every screenshot and picture they asked for instead of them having to do their own research, which I heard isn't too quick. If you help them out by providing the clearest info you can, it shouldn't take too long.
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I have to say I was a bit nervous getting variable rate loans, but I just received a document in my account telling me that my interest rate has dropped. My rate is now 3.93% after subtracting the auto-pay discount.
I figured they would change the interest rate whenever it would benefit them, but this is good to see.
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How are they at applying additional principal payments?
Looks like you are in luck. I just asked them via online chat:
Visitor
Can you tell me if additional payments are paid entirely to principal, or if they pay the loan ahead?
Samantha
Thanks for your question! Additional payments would be applied directly to principal. You would still need to make your minimum monthly payment every month.
Making additional payments will shorten the life of your loan, by paying off principal faster.
Perfect timing :) Thanks so much!
I also refi'd with Sofi in December and I couldn't be happier. I routinely log on to make extra payments and it is just as easy as logging into my bank's site. I scheduled an extra payment for a week out and then a day later changed my mine (a random expense came up). I logged back on and was able to cancel it. For the first time, I feel like I'm making progress on my SL's. Jan. 1, I owed $157k. It's now down to $152k which is still disgusting but progress is happening because most of my payment now goes to principle.
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I also refi'd with Sofi in December and I couldn't be happier. I routinely log on to make extra payments and it is just as easy as logging into my bank's site. I scheduled an extra payment for a week out and then a day later changed my mine (a random expense came up). I logged back on and was able to cancel it. For the first time, I feel like I'm making progress on my SL's. Jan. 1, I owed $157k. It's now down to $152k which is still disgusting but progress is happening because most of my payment now goes to principle.
What were your interest rates before and after refinancing? The interest savings must be insane on that big of a balance.
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I also refi'd with Sofi in December and I couldn't be happier. I routinely log on to make extra payments and it is just as easy as logging into my bank's site. I scheduled an extra payment for a week out and then a day later changed my mine (a random expense came up). I logged back on and was able to cancel it. For the first time, I feel like I'm making progress on my SL's. Jan. 1, I owed $157k. It's now down to $152k which is still disgusting but progress is happening because most of my payment now goes to principle.
What were your interest rates before and after refinancing? The interest savings must be insane on that big of a balance.
I had 9 loans -- 6 of the 9 were at 6.8% and the other 3 were at 7.6%. Those 3 were really huge -- $28k to $33k each. I was paying about $30 PER DAY in interest. Almost $1000/ month just in interest and getting nowhere.
After refi'ing with Sofi, my rate is 3.91% (variable) and most of my $1583/ mo payment goes to principal. On Jan. 1, my balance was $157,112. Right now, it is $152,678.
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I was paying about $30 PER DAY in interest.
(https://38.media.tumblr.com/5b21998ab1a55dd621c09d75fe26ce6f/tumblr_mjkpa6IE3s1rg9b6zo1_400.gif)
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^^^^ Ha! Love it.
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I also refi'd with Sofi in December and I couldn't be happier. I routinely log on to make extra payments and it is just as easy as logging into my bank's site. I scheduled an extra payment for a week out and then a day later changed my mine (a random expense came up). I logged back on and was able to cancel it. For the first time, I feel like I'm making progress on my SL's. Jan. 1, I owed $157k. It's now down to $152k which is still disgusting but progress is happening because most of my payment now goes to principle.
Good luck on tackling the beast! Please provide updates.
What were your interest rates before and after refinancing? The interest savings must be insane on that big of a balance.
I had 9 loans -- 6 of the 9 were at 6.8% and the other 3 were at 7.6%. Those 3 were really huge -- $28k to $33k each. I was paying about $30 PER DAY in interest. Almost $1000/ month just in interest and getting nowhere.
After refi'ing with Sofi, my rate is 3.91% (variable) and most of my $1583/ mo payment goes to principal. On Jan. 1, my balance was $157,112. Right now, it is $152,678.
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Here's the beauty of a variable interest rate . . . my rate just went DOWN from 3.91 to 3.80%. Nice.
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Here's the beauty of a variable interest rate . . . my rate just went DOWN from 3.91 to 3.80%. Nice.
Yup, mine dropped a bit too. I don't plan to be paying this loan for too long (2 years maybe), but if it swings the other way I might raid a bit of my emergency fund to drop the balance a bit.
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Well, I refi'ed with SoFi and things are not going well. It's not SoFi - it's Navient. Basically, SoFi sent the payment to Navient. Navient ate it instead of applying it to my account. Navient is stupid and can't figure it out. They also won't talk directly to SoFi. At this point, they actually owe me money. Did I mention that Navient needs something like 5 days to cancel an upcoming auto-payment?
So, SoFi sent the problem to their funding dept and they're researching. They'll try to fix things on their own, but if they can't they'll call me and conference in Navient. If I'm on the line then Navient will talk to SoFi.
The SoFi people are being really nice and helpful with all this. Everyone I've spoken with has a good attitude and even a sense of humor! Hopefully everything thing will get sorted out tomorrow, but be aware that when things don't work you need to do some of the leg work.
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Well, I refi'ed with SoFi and things are not going well. It's not SoFi - it's Navient.
Hmm, mine were sent to TruStudent, not Navient. I just assumed that Sofi sent everyone to the same company, I guess not.
But I agree that the customer service at Sofi is pretty great in regards to helping you through any problems.
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Well, I refi'ed with SoFi and things are not going well. It's not SoFi - it's Navient.
Hmm, mine were sent to TruStudent, not Navient. I just assumed that Sofi sent everyone to the same company, I guess not.
But I agree that the customer service at Sofi is pretty great in regards to helping you through any problems.
It depends on where the loans were to begin with. The loans are with Navient, so SoFi had to send the money to them to refi. In retrospect, it would have been better if they'd sent it to me and I'd paid Navient, but I don't know if they do that.
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Ah ok, I didn't realize you were at Navient to begin with. I thought you meant they moved your loans over to Navient.
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The good news is that once you get things worked out w/ Navient your loans should go to TruStudent which, as far as student loan servicing company's go, has been the best I have worked with yet. (I've used AES, Nelnet, FirstMark and EdFinancial).
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The good news is that once you get things worked out w/ Navient your loans should go to TruStudent which, as far as student loan servicing company's go, has been the best I have worked with yet. (I've used AES, Nelnet, FirstMark and EdFinancial).
The SoFi loan servicer is a different one than any you've mentioned - M- something (not on the personal computer so no records). No payment experience yet, but the website seems to work fine, which is better than Navient's!
Also, got an email today from Navient that the payment posted, so something worked. Yay! Technically, they should have posted it 2 weeks earlier than they did and thus decrease the interest, but I don't care enough to argue with them over a couple dollars. Now, the roughly $200 they owe me is another matter if there's any problems getting the money back.
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The good news is that once you get things worked out w/ Navient your loans should go to TruStudent which, as far as student loan servicing company's go, has been the best I have worked with yet. (I've used AES, Nelnet, FirstMark and EdFinancial).
The SoFi loan servicer is a different one than any you've mentioned - M- something (not on the personal computer so no records). No payment experience yet, but the website seems to work fine, which is better than Navient's!
Also, got an email today from Navient that the payment posted, so something worked. Yay! Technically, they should have posted it 2 weeks earlier than they did and thus decrease the interest, but I don't care enough to argue with them over a couple dollars. Now, the roughly $200 they owe me is another matter if there's any problems getting the money back.
SoFi refinanced my loans but they're serviced by TruStudent. Maybe SoFi uses more than one servicer...
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They must, or they changed. My servicer is Mohela.
I am happy to report that Navient finally posted the payment! So now they're supposed to send me a check for the credit balance.
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So now they're supposed to send me a check for the credit balance.
Tell them they owe you 6.8% interest.
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So now they're supposed to send me a check for the credit balance.
Tell them they owe you 6.8% interest.
Well, they are refunding some of the interest they charged.
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That's great that they are refunding the extra interest. My loan payoff was overpaid as well but I had to return the balance to SoFi to apply to my principal. I had read the fine print (cause I'm a lawyer) so I called it to their attention. Their customer service staff were surprised and didn't seem like they had handled that before. They called me back and told me I was right and sent me a pre-paid package to return it in. I'm not sure if they would have ever noticed or cared if I had kept it.
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I'll use it for an extra payment when I get it. The excess is because Navient needs an excessively long notice time to cancel an auto-payment.
When the posted the payment, they posted it as of when they got it, which is correct. It just took them 2 weeks to do so.
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I'll use it for an extra payment when I get it. The excess is because Navient needs an excessively long notice time to cancel an auto-payment.
When the posted the payment, they posted it as of when they got it, which is correct. It just took them 2 weeks to do so.
Makes sense. At least they acknowledged it and you don't have to fight them for it.
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Please see MMM recommendations page for Sofi information and link that will get YOU $300 and not someone else.
http://www.mrmoneymustache.com/mmm-recommends/
Like most financial companies, they have a referral program. I signed this blog up for it, but then renegotiated the terms so that $300 that would have gone to me, goes to you instead. And there is no origination fee.
Check out their rates at www.sofi.com/mrmoneymustache
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Please see MMM recommendations page for Sofi information and link that will get YOU $300 and not someone else.
http://www.mrmoneymustache.com/mmm-recommends/
Like most financial companies, they have a referral program. I signed this blog up for it, but then renegotiated the terms so that $300 that would have gone to me, goes to you instead. And there is no origination fee.
Check out their rates at www.sofi.com/mrmoneymustache
Wow, you are awesome. Great first post. Welcome to the forums! :)
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Please see MMM recommendations page for Sofi information and link that will get YOU $300 and not someone else.
http://www.mrmoneymustache.com/mmm-recommends/
Like most financial companies, they have a referral program. I signed this blog up for it, but then renegotiated the terms so that $300 that would have gone to me, goes to you instead. And there is no origination fee.
Check out their rates at www.sofi.com/mrmoneymustache
Cool, pretty good deal.
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Ah, her post quotes MMM. I don't think she negotiated it. Makes sense. Otherwise, I was a little skeptical that a new poster would go through all of that trouble. Just to clarify, the usual SoFi program is for the first few months after you refi you can refer people and the person referred gets $100 and the person doing the referring gets $300. After those initials months, both people get $100. If SoFi will let MMM offer $300 indefinitely that is really awesome.
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I refi with sofi and it was one of the better loan experiences my wife and I have ever had.
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I just refinanced a large credit card debt that came from building our home. It wasn't the fastest process in the world, but eventually, everything went through and my interest rate dropped in half. I think that their online customer service and information is pretty poor; you pretty much have to contact customer service to find out anything! Oh well, at least now we have a prayer of paying that large home-building hangover off.
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I refi with sofi and it was one of the better loan experiences my wife and I have ever had.
Same here. I have saved around $1000 in accrued interest since I refinanced in December. Pretty solid return for my time so far.
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I got an email today saying that my interest rate went up on my loans. I immediately started regretting getting variable rate loans, basically panicking and wondering if I should take money out of my emergency fund to pay a bunch off.
Logged in and saw it increased by 0.01%. Crisis averted.
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I recently refinanced my student loans with Sofi and was very pleased with the process. It took about 2 weeks and everything went pretty smooth. I would definitely recommend them. Also, use someone's link so you can get the referral bonus and they can as well. https://www.sofi.com/refer/5/15781 (https://www.sofi.com/refer/5/15781)
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I was skeptical about refinancing my student loans because I always assumed it would be a difficult process that would end up not saving me much money. However, I decided to try Sofi and was very impressed! The process was all online and very easy to follow. I am saving about 2% in interest and was able to consolidate all of my loans.
If you're interested in applying, use my referral link and get $100!
https://www.sofi.com/refer/5/8279
Enjoy!
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^ Glad to see it worked out well for both of you.
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Hi guys! Anyone have any luck with refinancing University of Phoenix loans? SoFi is a no. :(
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Hi guys! Anyone have any luck with refinancing University of Phoenix loans? SoFi is a no. :(
Here is an article talking about a few more places: https://studentloanhero.com/featured/5-banks-to-refinance-your-student-loans/
Hopefully one of them lets you refi with them, good luck!
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Hi guys! Anyone have any luck with refinancing University of Phoenix loans? SoFi is a no. :(
Here is an article talking about a few more places: https://studentloanhero.com/featured/5-banks-to-refinance-your-student-loans/
Hopefully one of them lets you refi with them, good luck!
Sweet! Thanks! Signed up for Earnest and have a message out to Citizen's. Crossing my fingers! This 6.25% is just painful and rude.
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Sweet! Thanks! Signed up for Earnest and have a message out to Citizen's. Crossing my fingers! This 6.25% is just painful and rude.
ApeSays, any luck?
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Sweet! Thanks! Signed up for Earnest and have a message out to Citizen's. Crossing my fingers! This 6.25% is just painful and rude.
I looked at SoFi, but I was denied. SoFi will only refinance law-school loans if the applicant has taken (& passed) a bar exam.
Instead, I tried out Earnest. The application process was interesting—the company wanted to connect to my LinkedIn account & my financial accounts. Since I was paying 6.62% on my existing student loans, I gave them a shot. Overall, I was pleased at the 2-day turnaround & I was pleased that Earnest seems to put considerable weight on balance-sheet assets. i.e. The company gave me "credit" for all of my retirement savings during its underwriting process. Earnest didn't want to see any household (read: wife's) income or tax returns; it only looked at my personal assets & income.
After getting my approval, I was presented with a sliding bar that let me choose an initial monthly payment amount. Beneath, it summarized what a Floating & a Fixed rate option would look like, given the selected monthly payment. I thought that was a pretty neat touch. My wife & I decided to maintain our existing payment level, but switching to a floating rate. This let me shave about 4 years off of the scheduled repayment. Of course, I am hopeful that I'll pay off sooner!
Overall, I was very pleased with the process. For anyone who doesn't fit into SoFi's "box," I would encourage you to take a look at Earnest. If you're interested in learning more, I would be happy to share details.
Of course, Earnest does have a referral program ($200 to me per referral, unfortunately nothing to the applicant =\ ). I couldn't find someone else's link on MMM, or else I would've used it. If anyone wants to apply, here is my link: http://bit.ly/1eHjggV (http://bit.ly/1eHjggV)
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Anyone know what SoFi's max debt to income ratio is? Or if there's another refi provider that will accept a 52% DTI?
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Anyone know what SoFi's max debt to income ratio is? Or if there's another refi provider that will accept a 52% DTI?
Do you mean your monthly payment to income ratio or overall debt to income ratio?
I don't think overall DTI is the issue for SoFi unless they changed their standards. When I did my refi I owed just over $70k on the loans I was refinancing, another $5k from undergrad and was making $85k. I'm also a joint borrower on an over $200k mortgage and I don't think I had yet sold my prior property so I likely had another $150k mortgage in my name (joint).
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Hi all -- I am considering refinancing my loans.
I have 109K in student loans and 51K gross in income. Been paying on the balance less than a year as I graduated in 2014. My monthly DTI ratio is about 52% if you count 1250/2400 under the standard plan. Right now I'm on IBR and my payments are $570/2400 or 24% as of this month.
Not eligible for Common Bond.
Rejected by Sofi. I was rejected for "Excessive obligations relative to income."
Any recommendations for places to try?
To be honest I'm not convinced that switching from federal to private is worth the risk. But I have a 44K loan at 7.65% that I would like to lower and am considering options.
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This article has a few other companies to try: https://studentloanhero.com/featured/5-banks-to-refinance-your-student-loans/
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Hi all -- I am considering refinancing my loans.
I have 109K in student loans and 51K gross in income. Been paying on the balance less than a year as I graduated in 2014. My monthly DTI ratio is about 52% if you count 1250/2400 under the standard plan. Right now I'm on IBR and my payments are $570/2400 or 24% as of this month.
Not eligible for Common Bond.
Rejected by Sofi. I was rejected for "Excessive obligations relative to income."
Any recommendations for places to try?
To be honest I'm not convinced that switching from federal to private is worth the risk. But I have a 44K loan at 7.65% that I would like to lower and am considering options.
You can try DRB but you should assess whether refinancing is in your best interest since you are on IBR. I think it probably is if you expect any sort of raise down the line but you are pretty close to that grey area.
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Hi all -- I am considering refinancing my loans.
I have 109K in student loans and 51K gross in income. Been paying on the balance less than a year as I graduated in 2014. My monthly DTI ratio is about 52% if you count 1250/2400 under the standard plan. Right now I'm on IBR and my payments are $570/2400 or 24% as of this month.
Not eligible for Common Bond.
Rejected by Sofi. I was rejected for "Excessive obligations relative to income."
Any recommendations for places to try?
To be honest I'm not convinced that switching from federal to private is worth the risk. But I have a 44K loan at 7.65% that I would like to lower and am considering options.
You can try DRB but you should assess whether refinancing is in your best interest since you are on IBR. I think it probably is if you expect any sort of raise down the line but you are pretty close to that grey area.
Wintertell has really high interest debt and is trying to refi to save on interest. It could save her thousands of dollars just going from 7.65% to something more reasonable like 4 or 5%. She can handle higher payments.
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You can try DRB but you should assess whether refinancing is in your best interest since you are on IBR. I think it probably is if you expect any sort of raise down the line but you are pretty close to that grey area.
I agree with forummm—the high interest rate is not going to go away because of the Income-based-repayment period. Get that interest rate down as quickly as you can! =)
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What kind of reputation does DRB (https://student.drbank.com/?provider=slh&utm_source=SLH_002_AA_1436558037279) have? Thus far no one on this forum hasn't mentioned using them and their experience, so would love to get some input!
Forummm is right, I can handle the payments -- we've been paying between 1.5/2K steadily each month. I'm on IBR right now to optimize put my extra on the highest loan.
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I tried going through DRB's app process and it was significantly more tedious than other places. To the point I gave up during it. They seemed to want a cosignor no matter what that didn't live at your own address. I'm not going to ask my retired parents to cosign anything.
I've been working through all these places to try and refinance a 6.55% 40k loan and thus far meet earnest is offering the lowest rate with the least amount of headaches. I haven't yet pulled the trigger though.
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I tried going through DRB's app process and it was significantly more tedious than other places. To the point I gave up during it. They seemed to want a cosignor no matter what that didn't live at your own address. I'm not going to ask my retired parents to cosign anything.
I've been working through all these places to try and refinance a 6.55% 40k loan and thus far meet earnest is offering the lowest rate with the least amount of headaches. I haven't yet pulled the trigger though.
I had a similar experience with DRB. They had a lot of requirements and never failed to find a way to reject my application as incomplete. I tried twice and spent way too much time getting everything submitted but they rejected my application for some bogus reason, unable to confirm my identity, even though I submitted everything they wanted (actually submitted every document they requested as an alternative and still got denied on that basis. It didn't sense to me and I just accepted sofi's offer rather than try a third time. That said, this was nearly a year ago, so I would definitely apply with them because they may have improved their review process.
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Hi all.
I was wondering whether I can refinance my wife's student loans using my credit history. She just graduated and started her job and doesn't have much of a credit history (besides the student loans).
Mine is over 800. Does anyone know if this is possible?
Also is there a way to combine our credit so she gets the benefit of my credit history?
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I think you would have to co-sign for that.
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Hi all.
I was wondering whether I can refinance my wife's student loans using my credit history. She just graduated and started her job and doesn't have much of a credit history (besides the student loans).
Mine is over 800. Does anyone know if this is possible?
Also is there a way to combine our credit so she gets the benefit of my credit history?
You can definitely co-sign on the refi to improve her chances of getting the refi. If she dies or divorces you, then the debt becomes your responsibility too. Just be aware of that.
You can't give her your credit history exactly. But you can make her a co-owner or authorized user on your credit accounts and that should help her inherit history for those accounts.
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Thank you.
I will start the process and see what happens.
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I'm currently with MyFedLoan and have the classic 6.5% interest rate. I applied to SoFi through money mustache link today. Unfortunately SoFi would only offer me 15-year or 20-year on my $48k loan based on my mid 50k income. I have NO desire to acquire such a long loan term, especially when we're trying to pay it off ASAP. The issue is that FedLoan factors in a spouse's income because we file taxes jointly, but SoFi will only factor in a spouse's income if they are a co-signer. Well exposing my spouse to my loan liability (when he's not a co-signer now) just to get a lower interest rate is not something I feel comfortable doing. A real shame as I wanted to get that lower interest rate!
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I got an email today saying that my interest rate went up on my loans. I immediately started regretting getting variable rate loans, basically panicking and wondering if I should take money out of my emergency fund to pay a bunch off.
Logged in and saw it increased by 0.01%. Crisis averted.
LOL! Good one.
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I'm currently with MyFedLoan and have the classic 6.5% interest rate. I applied to SoFi through money mustache link today. Unfortunately SoFi would only offer me 15-year or 20-year on my $48k loan based on my mid 50k income. I have NO desire to acquire such a long loan term, especially when we're trying to pay it off ASAP. The issue is that FedLoan factors in a spouse's income because we file taxes jointly, but SoFi will only factor in a spouse's income if they are a co-signer. Well exposing my spouse to my loan liability (when he's not a co-signer now) just to get a lower interest rate is not something I feel comfortable doing. A real shame as I wanted to get that lower interest rate!
There is no early payoff penalty. If you have the discipline, you could take the long-term loan to get the lower interest rate and then keep paying what you are paying now plus whatever extra payments you want to pay it off in 5 or 10 years.
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This is true, and I could do the early payoff, but the interest rates offered by SoFi were not that great for the 15 or 20 yr loan (Fixed 15-yr, 6.125%, 20-yr 6.375%).
My next step is to apply with Earnest. After submitting my info, Earnest is showing a better offer (Variable rates of 5 Years at 2.88%, 10 Years at 3.15%, and Fixed at 5 yrs 4.62% and 10 yr at 4.99%.) They also factor in your retirement accounts, and personal savings to determine the rate, not just looking at income.
We'll see how it goes!
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This is true, and I could do the early payoff, but the interest rates offered by SoFi were not that great for the 15 or 20 yr loan (Fixed 15-yr, 6.125%, 20-yr 6.375%).
My next step is to apply with Earnest. After submitting my info, Earnest is showing a better offer (Variable rates of 5 Years at 2.88%, 10 Years at 3.15%, and Fixed at 5 yrs 4.62% and 10 yr at 4.99%.) They also factor in your retirement accounts, and personal savings to determine the rate, not just looking at income.
We'll see how it goes!
Nice! Good luck!
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Thanks. Will try to update on here if the refinance goes through with any company. FYI, fellow lawyer here although a government one, hence the lower salary. :)
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Hey Shortstuff -- I have a 50K income with quite a load of student loans, but was able to refinance my biggest loan with a balance of 44K through Earnest with a 3.35% variable interest rate (including auto pay). If you don't get through with all of your student loans, try refinancing just a portion. Got rejected by SoFi and CommonBond before Earnest accepted me.
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Thank you all for this thread! I was researching SoFi and have been a longtime MMM reader. Though I've been trying to have and dig myself out of debt, the interest rates were really depressing and I felt like my progress has been slow.
First I got my boyfriend who has about 100k in loans, some of which had interest rates of 7-8%, to try out SoFi. He applied for a refi that will cover about 1/3rd of his loans (the rest have rates lower than SoFi's offerings). They approved him and he took a rate of approximately 5% fixed. It will ultimately save him thousands and his loan will be paid more quickly as well.
I got the courage to apply a week ago and was amazed how fast I was approved. My remaining student loan debt of $14k was through Navient and I was paying about 6.4% in interest after my autopay discount. I took SoFi's offer of 3.825% variable on a 5 year loan. I plan to have it paid off even sooner.
I have also struggled with consumer debt for various life reasons during college and after, and have about 11k on a card that has a painful 17.9% interest rate. Was just preapproved for a 6.8% variable rate on a $10.9k, 5 year personal loan from Sofi and hoping that goes through quickly as well. So far it's been a great experience and I feel closer to getting out of debt finally and beefing up my 401k, then other investments and savings. I'm far from FI but motivated as ever.
Posting my SoFi referral link, if anyone would like the $100 bonus:
For student loans: https://www.sofi.com/refer/5/55548
For personal loans: https://www.sofi.com/refer/148/55548
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Hey Shortstuff -- I have a 50K income with quite a load of student loans, but was able to refinance my biggest loan with a balance of 44K through Earnest with a 3.35% variable interest rate (including auto pay). If you don't get through with all of your student loans, try refinancing just a portion. Got rejected by SoFi and CommonBond before Earnest accepted me.
Thanks Wintertell. I applied to Earnest. Application process was easy enough. Had to input a bunch of information but it was quite straightforward. I got accepted yesterday to refinance my $46k loan for a 2.95% adjustable or 4.76% fixed rate! I'm pleased. I am going with Earnest, and selecting the fixed rate simply because we might be a single income family in the future if we have a child and are concerned that when the adj rate increases a couple years down the road, it would impact us more severely if we had the 1 income. But otherwise I would have chosen that adjustable rate. If one refinance company doesn't work, I encourage others to try another one.
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I am going with Earnest, and selecting the fixed rate simply because we might be a single income family in the future if we have a child and are concerned that when the adj rate increases a couple years down the road, it would impact us more severely if we had the 1 income.
ShortStuff—when I was accepted by Earnest, they told me that every 6 months you'll have the option to resize your payment and/or switch between variable & fixed rate. If you are planning on paying the loan more aggressively than the minimum, it might make sense to do a period of floating rate so that you can allocate even more to paying down principal.
That said, if you expect to pay on a slow schedule, this is probably the best time to lock in a long-term fixed rate.
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In the process of refinancing my wife's student loans with Sofi. I had to cosign to get a decent rate since she is a foreigner and doesn't have much credit.
Took the 10 year (will pay it off in 2) 2.7% variable rate. For some reason the 7 year rate was higher than the 10. That's almost a 4% drop from the 6.55% we have been paying.
For those wondering how the variable rates work, they are tied to the 1 month LIBOR rate. You basically have a fixed rate, mine is 2.5%, and then the 1-month LIBOR rate is added to it, which is currently around 0.2%. Since it's based on the 1-month rate, your payment can change every month.
See historical rates here:
http://www.moneycafe.com/personal-finance/1-month-libor/
I had forgotten to go through a referral link, but I called and was able to get them to apply the MMM referral to my account and can see a $300 welcome bonus on the account. It was very simple. I just gave them the URL for the referral link and they applied it.
The refi is still in progress though. How much time did it take most of you for everything to go through?
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Hey Shortstuff -- I have a 50K income with quite a load of student loans, but was able to refinance my biggest loan with a balance of 44K through Earnest with a 3.35% variable interest rate (including auto pay). If you don't get through with all of your student loans, try refinancing just a portion. Got rejected by SoFi and CommonBond before Earnest accepted me.
Thanks Wintertell. I applied to Earnest. Application process was easy enough. Had to input a bunch of information but it was quite straightforward. I got accepted yesterday to refinance my $46k loan for a 2.95% adjustable or 4.76% fixed rate! I'm pleased. I am going with Earnest, and selecting the fixed rate simply because we might be a single income family in the future if we have a child and are concerned that when the adj rate increases a couple years down the road, it would impact us more severely if we had the 1 income. But otherwise I would have chosen that adjustable rate. If one refinance company doesn't work, I encourage others to try another one.
Congrats! That is a killer rate for a fixed loan. My fixed loan rate wasn't that low, so I went with the variable. Hopefully the LIBOR will raise slow enough so I can pay it off before it adjusts to the fixed rate I would have gotten.
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Just jumping in with my $0.02. I was a bit skeptical of SoFi at first, but it ended up being a pretty painless and (gasp!) pleasant process. Did mine almost exactly a year ago, hence the fuzzy details.
I had numerous law school loans ranging from about 2% to 7% interest. I decided to refi a large majority of them - basically those having interest rates above 3% or so. The process was very smooth, even considering Navient was being a pain. SoFi took care of most of that mess. Ended up taking a 10 year variable rate at about 3%/2.8% (with AutoPay). Think the rates are lower now? Repayment currently serviced through Mohela, which has been fine. Would definitely recommend SoFi for anyone that can get approved and has higher interest rate loans out there. Time from application to funding was astonishingly quick -- a little over a week? One tiny "gotcha" - SoFi wouldn't consolidate a private bar loan I had (these are commonly taken out by recent grads needing to pay for bar study/room/board after law school). Not a dealbreaker for me, though.
[edited to remove my referral links - apparently SoFi doesn't appreciate them being posted on public forums, per http://forum.mrmoneymustache.com/welcome-to-the-forum/official-sofi-student-loan-refi-referral-thread/ ]
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Can anyone tell me how long it takes to get the $300 welcome bonus? And do they apply it to your loan or just send a check?
I've made the first payment and it is still showing pending. Just wondering when it will show up.
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They send you a check / direct deposit. I get referral bonuses and they usually deposit once/month.
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Hi all -- I am considering refinancing my loans.
I have 109K in student loans and 51K gross in income. Been paying on the balance less than a year as I graduated in 2014. My monthly DTI ratio is about 52% if you count 1250/2400 under the standard plan. Right now I'm on IBR and my payments are $570/2400 or 24% as of this month.
Not eligible for Common Bond.
Rejected by Sofi. I was rejected for "Excessive obligations relative to income."
Any recommendations for places to try?
To be honest I'm not convinced that switching from federal to private is worth the risk. But I have a 44K loan at 7.65% that I would like to lower and am considering options.
I would REPAYE or IBR it. Its too risky to refi because of your debt-to-income ratio.
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That's just my income, not my HH income. We can afford to refinance. We ended up refinancing with Earnest.
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I'm soon going to try SoFi to refinance my wife's student loans (I don't have any). Sofi asks for the applicants income, not including spouse's income. But what if she has no income or its really low? I'm the breadwinner, make more than easily enough to pay these. What's the deal? How's this work?
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I'm soon going to try SoFi to refinance my wife's student loans (I don't have any). Sofi asks for the applicants income, not including spouse's income. But what if she has no income or its really low? I'm the breadwinner, make more than easily enough to pay these. What's the deal? How's this work?
It's her debt, not yours. Debt incurred before marriage doesn't necessarily become your debt that you're responsible for (debt incurred after, even just in her name, typically does). You may have to find out if you can refi it to debt in your name, or ask if you can get added, or see if they'll take household income even without that. Contact their customer service to see.
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I used the MMM link to refi with SoFi. Got my $300. (Thanks!)
Immediately after I put in an application to refi again with Earnest. I got a better rate and another $200. I haven't seen any referral links for Earnest on this site, so I thought I'd share mine:
www.meetearnest.com/invite/alan158
If you use that, we each get $200.
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I'm soon going to try SoFi to refinance my wife's student loans (I don't have any). Sofi asks for the applicants income, not including spouse's income. But what if she has no income or its really low? I'm the breadwinner, make more than easily enough to pay these. What's the deal? How's this work?
It's her debt, not yours. Debt incurred before marriage doesn't necessarily become your debt that you're responsible for (debt incurred after, even just in her name, typically does). You may have to find out if you can refi it to debt in your name, or ask if you can get added, or see if they'll take household income even without that. Contact their customer service to see.
We started an application in her name, which would have got our rate from 8% down to 4%. This was pretty good, but then we called and asked if I could co-sign for a lower rate. Turns out this was no problem. They activated a co-signer feature on our application; I uploaded my info, and off it went.
It took us about 4 weeks to get from initial preapplication to signing the application. Most of the time it was because a scanned document was blurry. Instead of them calling us about it, I had to push the rope and call them and ask for status if we hadn't seen or heard anything in a while. So I would have liked the customer service to be a little more proactive, would have probably finished up our application quite a bit sooner instead of me having to nudge them along. Also, it seemed like they mixed our emails up a few times (primary and co-signer need separate logins) and a few times the messages they sent me didn't comport with what they were telling my wife, nor what was on the web site. I think they're still working gremlins out of the system.
In the end, refi approved: 19k originally at 8% down to 2.38%, (5 year variable). Wahoo! Time to put some erstwhile interest dollars to work for us. I think we'll save $3500 in interest over the life of the loan, more if we payoff sooner (but the loan is now lower rate than our mortgage, so we're gonna slow roll it...)
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Congrats, well done!
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Glider, can I ask what your fixed rate offer was? I've already refi'd once but I'm considering doing it a second time because I think rates are even lower now.
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Glider, can I ask what your fixed rate offer was? I've already refi'd once but I'm considering doing it a second time because I think rates are even lower now.
I want to say it was in the low to mid 3's. Unfortunately I don't remember exactly and the site doesn't show that page any more.
They did however disclose in our signed agreement that the variable rate could vary no higher than 8.9%, which is only slightly higher than the loans were in the first place. Should that unlikely event happen, we'll just pay them off fast, since the remaining principal (19k) isn't that high.
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Immediately after I put in an application to refi again with Earnest. I got a better rate and another $200. I haven't seen any referral links for Earnest on this site, so I thought I'd share mine:
If you use that, we each get $200.
Too bad that you didn't see my post earlier in this thread (also on Page 2, reply #57)! Also, from reading the terms of the Earnest site, there doesn't seem to be any sort of a bonus for the new applicant. There is only a bonus paid to the referrer.
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I just got an email this week advertising the bonus to both the applicant and the referrer. I refinanced with Earnest and love it. It's been 7 months and I plan to shift my loan amount/length/rate given the fact that I've dumped so much debt in the last 7 months. Hopefully I can grab an even lower rate.
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Fantastic! Great work on making progress—knocking down that interest rate will help you move even faster to killing the balance.
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I surveyed Earnest, Sofi and LendKey to refinance my 6.5% FedLoan of ~$17,000. I have good credit (~700-750) and a decent, stable income.
I ended up going with Earnest because they offered me the lowest rate (4.04% fixed, 5 years after the autopay discount). This ended up saving me several thousand dollars compared to the FedLoan piracy.
I attempted to get Sofi to match the offer I received from Earnest because of the fact that SoFi offers a slightly higher, $300 bonus from Mr. Money Mustache. The referral bonus for Earnest is only $200. However, the interest rate for SoFi would have been 5% fixed. They wanted to see a copy of the loan agreement between Earnest and myself, which I sent them. But they ultimately called me back and told me they could not match the offer. I don't know if this was a ploy to see the competitors offer or not.
LendKey’s interest rate estimate was closer to 5.5% for my profile for some reason so I didn’t even complete an application because I didn’t want them to run a credit check.
Each company has their own algorithm and I suspect that if you profile is slightly different, any one of these companies could be the one offering you the best deal. I strongly suggest not blindly taking the advice of any one here on this forum as to which of these companies is best – do your own research!! One must balance the need to get as many quotes as possible against the possible dings on your credit for each full-scale application that you complete. Remember, having your credit history run 1-3 times per year is about normal and will not be held against you.
If you do go with Earnest, here is the $200 bonus referral (that is, we each get $200 if you use this):
www.meetearnest.com/invite/erich13
(http://www.meetearnest.com/invite/erich13)
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My experience with DRB
I graduated in May 2015 and started working in August. I had about $215k in total loans with an average of 5.8%. This included a mix of federal and private loans. I applied to both SOFI and DRB. SOFI offered me 4.99% fixed for 5 years and ~3.6 variable rate, while DRB offered a variable rate of 3.22% and 4.5% fixed for 10 years. I went with DRB's variable rate, which is based on the 3 month Libor. I refinanced 171k in December. My credit score when i refinanced was 812. Even though my rate is considerably low, I am always on the lookout for lower rates. First Republic Bank has the best rates out there. If you are local to one of their branches, definitely look into it. They offer fixed rates as low as 1.95%. My current variable rate is 3.61. The 3 month LIBOR rate as been going up since i refinanced. I will probably try to refinance again once I make a significant balance on the amount owed.
I recommend applying to multiple lenders at the same time and the going with the lender with the better term.
July 2018 edit: refinanced with LendKey and now have a fixed rate of 3.15%. See my referral links below.
referral links
LendKey
https://mbsy.co/lendkey/Dimeji
Earnest
https://www.earnest.com/invite/dimeji
SOFI
https://www.sofi.com/share/827076
CommonBond
https://commonbond.co/?referrer=5a0422c5238f5c4e0984f2f40d2d4f58&referred
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I processed my student loan refinance through Earnest. The process was quick, and simple. Customer support is just a call away, and always very helpful. They compete mainly with SoFi, which i applied as well. Overall i have to say the experience was better going through the process with Earnest. If by any chance you decide on Earnest, by using my Earnest referral link:
https://www.earnest.com/invite/daniel3316
You can get a bonus of $200 dlls. It is a nice way to start paying off those student loans.
When you share your personal referral link with your friends and family, you'll each get $200 when they refinance with Earnest.
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I've been looking at SoFi for a while now and have lots of friends who highly recommend it. I have high interest rates (6.55 on some and 5.16 on more), but I've budgeted to pay off all of the loans within 2 years. SoFi is offering a variable rate of 3.865, which is good but worrisome with the idea of three rate hikes anticipated in 2017.
The savings is around $1400 including the MMM referral. I get that $1400 is not chump change, but I guess my hesitation is that SoFi does not have as good as a program as FedLoan. Does SoFi have the ability to adjust if unemployment or underemployment occurs? From my understanding they have some unemployment protection, but only for 12 months aggregate.
Any notion on whether the $1400 is worth that small peace of mind? Anyone used the SoFi unemployment protection?
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I've been looking at SoFi for a while now and have lots of friends who highly recommend it. I have high interest rates (6.55 on some and 5.16 on more), but I've budgeted to pay off all of the loans within 2 years. SoFi is offering a variable rate of 3.865, which is good but worrisome with the idea of three rate hikes anticipated in 2017.
The savings is around $1400 including the MMM referral. I get that $1400 is not chump change, but I guess my hesitation is that SoFi does not have as good as a program as FedLoan. Does SoFi have the ability to adjust if unemployment or underemployment occurs? From my understanding they have some unemployment protection, but only for 12 months aggregate.
Any notion on whether the $1400 is worth that small peace of mind? Anyone used the SoFi unemployment protection?
When I left steady employment at a big law firm in September of 2015, SoFi gave me 6 months of payment abeyance. They would have allowed me to make no payments at all, but I elected to continue paying the interest so I didn't backslide on principal owed during that 6 month window. They were absolutely great to work with and I owe then a mortgage-worth!
I have the adjustable rate loan (10 year term) and thanks to rate hikes my monthly payment has gone from $1702 to $1718.00. My interest was 4.1% and is currently 4.78 (it just went up). Which, IMHO, still beats the pants off the 6.9 and 7.8 I was paying for federal student loans.
YMMV
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I don't watch TV much, but happened to be somewhere when one was on. Saw a commercial for So-FI(!). Later, another one. Are they loosening up a bit? Anyone know?
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I'm done!!! I've paid them off. Today is the day my payments normally came out. It's amazing. I would never have paid them all off by now without getting a better interest rate.
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Looks Ike this thread went cold without a single Huzzah! for Blond Lawyer. So sorry your milestone was, IMO, insufficiently acknowledged. Cheers to you and your clean slate!
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Looks Ike this thread went cold without a single Huzzah! for Blond Lawyer. So sorry your milestone was, IMO, insufficiently acknowledged. Cheers to you and your clean slate!
Thanks! I know it is an old thread so I wasn't insulted.
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You still deserve kudos, Blonde Lawyer! Hip hip, hooray!
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+1 to Dicey. Way to go, BL!
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Great job BL!
It's funny how many law school loans are on this thread. I'm in the same boat.
I refi'd about $191K through Earnest and was really happy with the process (~3.80%). After I completed my refi, I did some comparison shopping, and found out that SoFi could beat the rate by a healthy margin. Earnest was good enough to match their rate.
That was about a year ago. My Earnest rate has crept up to 4.13%. I recently got an offer from SoFi to refinance at about 3.95%, and they are offering an additional incentive of .125% reduction. I doubt Earnest will match .25% reduction, but you never know. I doubt they want to lose me to their biggest competitor.
Anyhow, I'm likely to move over the SoFi. Since no points are paid, it's a purely math right?
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Anyhow, I'm likely to move over the SoFi. Since no points are paid, it's a purely math right?
Yep!
Even if points are paid, it's purely math (the math just becomes a lot simpler without, just comparing rates).
Aside from any value on your time of getting it done. But at your loan balance, seems worth it. :)
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Great job BL!
It's funny how many law school loans are on this thread. I'm in the same boat.
I refi'd about $191K through Earnest and was really happy with the process (~3.80%). After I completed my refi, I did some comparison shopping, and found out that SoFi could beat the rate by a healthy margin. Earnest was good enough to match their rate.
That was about a year ago. My Earnest rate has crept up to 4.13%. I recently got an offer from SoFi to refinance at about 3.95%, and they are offering an additional incentive of .125% reduction. I doubt Earnest will match .25% reduction, but you never know. I doubt they want to lose me to their biggest competitor.
Anyhow, I'm likely to move over the SoFi. Since no points are paid, it's a purely math right?
I'd say it is just math but also remember that you are resetting the clock on your 5/10/15 years to pay the loans off. If you re-fi, you should figure out how much extra to put towards the loans so that you aren't extending your repayment years and year, unless that is part of your plan.
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I currently have a 113k loan at 2.75% variable [15 year loan @ ~$800 monthly].
I was just approved for 2.40% variable from another bank [7-year loan @ ~$1450 monthly] OR
3.85% fixed to be paid off in 7 years ($1535 monthly)
Is it wise to stay with the variable option or go fixed rate. Do you foresee rates on the variable loans exceeding the fixed rate in 3 years? I should have these paid in 5 years. Thanks!
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I currently have a 113k loan at 2.75% variable [15 year loan @ ~$800 monthly].
I was just approved for 2.40% variable from another bank [7-year loan @ ~$1450 monthly] OR
3.85% fixed to be paid off in 7 years ($1535 monthly)
Is it wise to stay with the variable option or go fixed rate. Do you foresee rates on the variable loans exceeding the fixed rate in 3 years? I should have these paid in 5 years. Thanks!
That's a phenomenal fixed rate. I went with the fixed rate because I am risk averse. I found more people here went with the variable rate. I have no idea whether rates will go up or not but I can't imagine they would go much lower.
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Thanks BL.
I am leaning towards the fixed rate. I have a feeling rates will continue rising but just not sure how fast it will rise. I can pay off the loan in the next few years but I'm trying to balance debt repayment vs. investing.
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Thanks BL.
I am leaning towards the fixed rate. I have a feeling rates will continue rising but just not sure how fast it will rise. I can pay off the loan in the next few years but I'm trying to balance debt repayment vs. investing.
Just adding a data point here. My variable rate at Earnest jumped from 4.13% to 4.31% Yikes! Biggest jump I've seen so far. I may need to reconsider the fixed vs. variable rate when I refi with Sofi.
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The fixed versus variable interest rate question when refinancing student loans is one of several important decisions a borrower must make when considering to refinance student loans (the others being whether to refinance at all and term length). When I refinanced my loans with SoFi, I considered three factors when deciding on the fixed versus variable question: (1) planned payoff timing, (2) my risk tolerance in a rising interest rate environment, and (3) the spread between the fixed and variable rates.
If you are going to be aggressive in paying off loans, meaning that you are planning to pay more than is required each month in an attempt to eliminate the debt as quickly as possible, taking the lower interest rate offered by a variable refi may be worth it, because there will be less money paid toward interest and more money every month going toward principal. If you believe that interest rates are going to skyrocket in the next X years, a fixed rate may be a better choice (and vice versa). And if the spread between interest rates is large or small enough, it may sway your preference for one type of loan over another.
As someone who graduated law school with just under 100k in student loan debt, I understand how much interest accrues on student loans. When I refinanced, the first time, I reduced my effective interest rate (due to auto debit reductions) from 6.55% to 3.99%. That saved me thousands of dollars in interest. I planned to pay down my loans as quickly as possible, as I had been doing, but I also knew that I would have other savings priorities (buying a house) while I was paying off my loans. I also thought that interest rates might climb in the couple of years I would be paying back by refinanced loans so I hedged and went with a shorter team loan (five years) to get the best rates but a fixed rate at 4.24% (effective 3.99%). I don't remember the specific numbers about the interest rate spread but the spread didn't sway me one way or the other.
I'm glad I refinanced my student loans with SoFi -- I actually did it twice because there are no costs to the refi and after buying the house I wanted a lower monthly payment (interest rate stayed the same) in case I needed to stop aggressively paying off my loans. I am now approaching one year without student loan debt and I saved close to $3,000 by refinancing my student loans to a lower interest rate with SoFi.
SoFi made the process very easy and I'm happy I chose them over other lenders. If you are interested in refinancing your student loans with SoFi, feel free to use my referral link and you will get $100 for refinancing with them: sofi.com/share/5838 (http://sofi.com/share/5838)
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I really appreciate everyone sharing their experiences on this thread, after reading a few other sources and forums I finally just refinanced my student loans! For over 5 years I've been carrying over $100k in loans with interest rates ranging from 4.25% - 8.5%. The 8.5% loan was a private loan, which I paid off last month (I prefer the avalanche method over snowball - it seems to me snowball only makes sense if you're struggling with motivation to keep paying as much as you can into the loans, which I don't struggle with – I am very motivated to crush this debt!!).
That left me with just over $92k in loans remaining, all federal, with a weighted average rate of 6.25%. My credit score is 791 and I have a 6-figure income, but from a lender's perspective I probably still look risky because of my debt to income ratio (I have a pretty large mortgage, along with the student loans and a car loan, and I have an alimony payment too). I checked out rates on Credible, and then a week ago I submitted applications to SoFi, CommonBond, LendKey, and Earnest. After reading so much about SoFi on MMM and in the forums, I figured I'd probably go with SoFi, but I wanted to do my due diligence and apply to the others too. I'm glad I did, because here are the fixed rates they all offered for a 7 year payoff:
SoFi: monthly payment $1214.31, interest rate 4.438%
CommonBond: $1208.32, 4.54%
LendKey: $1235.49, 5.10%
Earnest: $1201.55, 4.28%
So I finalized the agreement with Earnest, and had them take over all of my loans except one, the one with a slightly lower rate at 4.25%. Those points add up, after all.
The application process with all of the lenders was super smooth, overall I think I'd be happy working with any of these companies if they offered the best rate (and I intend to check again every 6-9 months from now on). One detail worth noting is that CommonBond took 6 days to review and approve my application, which seemed like a long time. The other lenders all gave approval within hours, and I signed the agreement with Earnest by the end of the day, same day I submitted my application.
I used @djballer's referral link, and if anybody wants to use mine, please do! I would really appreciate it!
Earnest referral link: https://www.earnest.com/invite/brandy567 (we each get $200)
SoFi referral link: sofi.com/share/2794324
CommonBond referral link: https://commonbond.co/?referrer=sHf10eGsCACP9ebS6Z5C9C5H1UW_W5vtkP4Sa102hSK2lcOlHaPpAV6VUKjWVOi5
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I’m very grateful you used my referral link! I made the post 2 years ago when my loan balance was $113k. It’s now down to $64k. I’ve been very aggressive. I’ve also refinanced two more times since then and also collected $800 in total bonuses. Thanks again.
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@djballer You're welcome! Congratulations on tackling that debt, you've made awesome progress 💥 Do you have any advice on how often to refi student loans? I've heard it's worth checking rates every 6-9 months, but if you've refinanced twice in 2 years it sounds like your schedule is more like every 9-12 months. Any particular reason for that?
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@denverbrandy,
My last refinance (8/19) was actually to reduce my monthly payment (from ~$1700 to $700, from a 5 to a 10 year installment). In so doing my rate increased from 3.15% fixed to 3.95% fixed. I needed the flexibility just in case of a job loss or other unforeseen events. Before that I had a 3.85% fixed rate. I still plan to pay off in <5 years. I just feel better knowing I can pay less if needed.
I suggest you always be on the lookout for lower rates and refinance when you have the opportunity. The only downside is its (slight) effect on your credit score(hard inquires and average age of credit accounts). If you have a 800+ credit score, or you don't plan on using credit in the next two years, you shouldn't worry about it. The goal is to save on interest.
When I graduated in 2015 with 225k, I was paying $1500+/month in interest. Now that the balance is in the low 60k's, I can stomach the ~$200/month in interest. I am also focusing more on savings/ investing.