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Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: superone! on July 14, 2015, 11:48:33 PM

Title: Refinance student loan with SoFi?
Post by: superone! on July 14, 2015, 11:48:33 PM
Hi all,

I have two student loans and I'm thinking about refinancing for better interest rates with SoFi--at least for my higher interest rate loan. But I have a few questions for those of you who may have done this.

The details:

~$18K loan @ 6.8% (ouch!)
~$4K loan @ 2.3 %

I'm currently paying the minimum on the 2.3% loan and putting the majority of my extra cash towards my 6.8% loan. I think I could refinance with SoFi and get the interest rate down on that loan considerably, but I'm concerned that I wouldn't be able to defer in case I lose my job. (I don't plan to refinance the 2.3%, but that one is pretty small potatoes anyway)

My employer is in a delicate position right now and could possibly go under. I don't have a huge emergency fund, and I know a job search might take a while, so I'm hesitant to lock myself into a loan payment, even with a lower rate, if I can't defer while unemployed. Obviously deferring this loan would be a last resort scenario, but it's pretty easy to do with a federal student loan and a lot less easy if I refinance privately, if I understand the way it works.

To be clear, I'm not definitely losing my job, but I'm worried about the impact refinancing could have if my company does end up going belly up and I have to live on my measly savings plus unemployment for a while.

Advice?
Title: Re: Refinance student loan with SoFi?
Post by: ShoulderThingThatGoesUp on July 15, 2015, 05:32:09 AM
Look for a new job now.
Title: Re: Refinance student loan with SoFi?
Post by: TrulyStashin on July 15, 2015, 05:37:39 AM
I refi'd with SoFi but in your shoes, I'd hold off.  Resolve the job situation first -- by getting a new job.  Then refinance. 
Title: Re: Refinance student loan with SoFi?
Post by: kpd905 on July 15, 2015, 06:24:21 AM
With your job situation, I wouldn't do it.  My job was pretty secure when I refinanced, so I didn't have any worries.
Title: Re: Refinance student loan with SoFi?
Post by: superone! on July 15, 2015, 06:33:27 AM
Thanks for the replies, everyone! That was my feeling as well. It feels like I'm wasting so much money on interest, given interest rates right now, but I don't really have the stomach for the risk. I just hope my situation stabilizes before interest rates go up again.

And yes, I'm definitely job hunting; I'd be stupid not to be. But I'm also trying to save my current company. I'm in a bit of a niche field so a job search will undoubtedly take a while.
Title: Re: Refinance student loan with SoFi?
Post by: Blonde Lawyer on July 15, 2015, 07:12:44 AM
One thing to look at is SoFi does have job placement assistance and their own version of emergency forbearance.  I don't know the consequences of using that program if you need it.  You might be better off with SoFi because they will assist you with finding another job.  However, there could be ramifications for knowing your job is tenuous and not disclosing that when applying. 
Title: Re: Refinance student loan with SoFi?
Post by: Chesterfield on July 16, 2015, 12:00:30 AM
Refi your higher interest loan. Keep your low interest loan. You plan to pay this off... Why not do it at a lower interest rate? Job stability is always a myth. Good luck!
Title: Re: Refinance student loan with SoFi?
Post by: superone! on July 16, 2015, 06:26:27 AM
Job stability isn't a myth when your company is having an all hands meeting to announce layoffs today. (As mine is). It's not likely I'll lose my job today, but the company can only last so long without a contract. It took me 18 months to find a job that was a good fit in my field during my last job search, so I'm thinking the refi should probably wait.

Part of it is that I'd want to refi to a lower interest rate but also a shorter loan term. That means higher minimum payments, in addition to the loss of the deferral option. I didn't know about SoFi's forbearance options though. I'll do a bit more poking around. I'll probably still refinance, as soon as (and if!) my company gets a contract that would keep us afloat for another 12 months.
Title: Re: Refinance student loan with SoFi?
Post by: Merrie on July 16, 2015, 08:58:46 PM
SoFi lets you forbear if you lose your job. It's basically the only reason they do let you forbear. I refinanced my 6.8% loans through them and got down to 5.365%. Your balance is much lower so you would probably be able to get a better rate. You don't have to refi all of them, you could keep the 2.3% loan the way it is.