Current balance is $105,000, and I am strongly looking at pausing things a bit for personal reasons that I don't want to get into that much. Basically, my wife wants us to pay her mom (who I love) to watch our son full time. This will be about $10-12k per year. Importantly, my in-laws are very financially responsible, so this is just a fallback account for them; the funds will be put in a savings account that they have access to, and if they don't need it, then they will return the funds to us.
Further, I need to start maintaining a better cash position. Again, I don't want to get into too many personal details.
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I think this requires me to pull back a bit on paying off my student loans full throttle. Given that, I think it might be time to pull the trigger on refinancing, which would allow me to be making more progress during this "pause" period. I received some quotes from SoFi:
7 years = 4.32% ($1,463/month)
10 years = 4.395% ($1,096/month)
15 years = 4.92% ($839/month)
The rate difference does not seem to be that big between the 7 year and 10 year re-finance, so to maintain a better monthly cash flow position, the ten year re-finance seems just right.
My current rate (averaged) for my federal loans is 6.06%. I could save almost 1.70% with that ten year re-finance, which is no small number on a $105,000 loan. In looking at the 10 year amortization schedule:
Current Loans (6.06%) = $1,169/month to pay off in ten years, with $530 going to interest at start of loan repayment.
Refinanced Loans (4.395%) = $1,096/month to pay off in ten years, with only $385 going to interest at the start of loan repayment.
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I think the plan here is to re-finance, and then evaluate my cash position at the end of each year. I think I'd pay these off before ten years given my income, but given that I think I need to hit the pause button, re-financing seems like the right move to save money on interest.
Any thoughts?