Poll

Would you refinance a $35k student loan from 5% to 4%? **update-refinanced**

Yes
9 (81.8%)
No
2 (18.2%)

Total Members Voted: 11

Author Topic: Would you refinance a $35k student loan from 5% to 4%?  (Read 748 times)

Civex

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Would you refinance a $35k student loan from 5% to 4%?
« on: September 25, 2019, 07:29:40 PM »
Hello,

I have been frustrated by my seeming lack of progress on my student loan and have started looking at refinancing. I am currently at 5% and SoFi is offering me a 3.94% fixed rate (variable is also 3.94%). I owe $35k (of $90k) and expect to pay it off in 20-26 months.

The current 5% is a consolidation loan I took out immediately upon graduation and starting work, and I am in year 5 of 25. Due to the amount it was automatically entered as a 25 year term. The best SoFi rate is based on a  5 year term.

Unbury.me is telling me that I only save ~$500 in interest and pay it off roughly 1 month earlier if I refinance. I have had 0 problems with my current loan servicer, so it is kind of hard for me to justify moving, but on the other hand it feels dumb to pass up essentially $500/hour with refinancing.

What would you do?

Thank you!

WhiteTrashCash

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Re: Would you refinance a $35k student loan from 5% to 4%?
« Reply #1 on: September 25, 2019, 07:32:12 PM »
Did you originally consolidate the loan through the federal government or is this through a private lender? That would make a big difference because the government will let you defer loans due to financial hardship in case a disaster were to happen.

Civex

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Re: Would you refinance a $35k student loan from 5% to 4%?
« Reply #2 on: September 25, 2019, 07:36:08 PM »
Did you originally consolidate the loan through the federal government or is this through a private lender? That would make a big difference because the government will let you defer loans due to financial hardship in case a disaster were to happen.

Private lender (state program)- I believe I lost all federal benefits with the refinance. Was a bit of a gamble at graduation, but I had multiple job offers and the minimum payment is ~$530/month; also allowed me to remove my parents as cosigners. At this point if something major happened I could pull money from Roth contributions and pay it off.

Goldielocks

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Re: Would you refinance a $35k student loan from 5% to 4%?
« Reply #3 on: September 26, 2019, 01:12:09 AM »
What do you mean your parents were cosigners?  Was it a private loan? If so, you would not have qualified for payment modifications anyway. 

If it was a Parent Plus loan, it was actually your parent's loan that you took over from them (they were the original persons who borrowed the money).


Civex

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Re: Would you refinance a $35k student loan from 5% to 4%?
« Reply #4 on: October 01, 2019, 08:02:51 PM »
What do you mean your parents were cosigners?  Was it a private loan? If so, you would not have qualified for payment modifications anyway. 

If it was a Parent Plus loan, it was actually your parent's loan that you took over from them (they were the original persons who borrowed the money).

They weren't parent plus loans; maybe grad plus? Or they could have been private loans through the state-at that time they were happy to loan money to instate students.

Anyway, I went forward and refinanced. Probably didn't get the lowest rate because I didn't rate shop, but I should save roughly ~$1k for about 2 hours of work and pay the loan off a month earlier than anticipated.

Thanks anyone who had input!

35andFI

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Re: Would you refinance a $35k student loan from 5% to 4%?
« Reply #5 on: October 07, 2019, 09:30:12 AM »
Anyway, I went forward and refinanced. Probably didn't get the lowest rate because I didn't rate shop, but I should save roughly ~$1k for about 2 hours of work and pay the loan off a month earlier than anticipated.

Sounds like a pretty good choice to me!

rws

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Re: Would you refinance a $35k student loan from 5% to 4%?
« Reply #6 on: October 08, 2019, 08:02:25 AM »
CHA-CHING! free $1k!

$35k over 20 months is $1750 a month, very impressive. I did something similar when i got out of college with about 30k in loans. Just keep chipping away at it and put every dollar you can scrounge up toward it. Work a second job / try to get OT in your current job if you can. You won't regret it.

Being debt free is a great feeling.

Civex

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Re: Would you refinance a $35k student loan from 5% to 4%?
« Reply #7 on: October 09, 2019, 08:09:07 PM »
CHA-CHING! free $1k!

$35k over 20 months is $1750 a month, very impressive. I did something similar when i got out of college with about 30k in loans. Just keep chipping away at it and put every dollar you can scrounge up toward it. Work a second job / try to get OT in your current job if you can. You won't regret it.

Being debt free is a great feeling.

Thanks!

This is actually the last 1/3 of my original $90k-so ready to be done with it. I feel good about paying it off in 2 years or less; with a little guy and hopefully another in the somewhat near future I'm planning on just staying steady; I'm trying to stay under 40 hours/week as much as possible! :D

EscapedApe

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Re: Would you refinance a $35k student loan from 5% to 4%?
« Reply #8 on: October 10, 2019, 12:18:19 PM »
The lower you can get that interest rate, the better. You did well by refinancing.

I'm in a similar situation. Got about 30,000 in student loans right now. I refinanced to a lower fixed rate, and I've cut down monthly expenses to the point where I'm able to throw about 2,000 every month at it. Due to pay it off some time next year.