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Looking for some Expert Advice for Student Loan Refinance

hmnguyen87 131 18 March 26, 2016 at 10:31 AM
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Hello Slickdealers,

I recently graduated from college and owe a shit ton of money from student loan. I am a pharmacist and have been working for the last 5 months. I am currently looking for a way to refinance and pay off the 150k of student loans that I owed. The loans come from all sources both private and government, I would say that they average around 6% interest rate. As a pharmacist I make around 120k a year, So I am looking for the best way to consolidate/refinance my loans. Any help/tips is much appreciated.

THanks

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#2
I would start by trying to get your private loans to a reduced rate. Do the private loans have higher interest rates than the government loans? Government loans typically offer more options/protection if something happens and you cannot work or lose your job. I would start by checking out Sofi.com. Lending tree may also be able to provide some other companies that can refinance as well.

Clark Howard (website and podcast) is another good resource for lots of information on this subject.
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#3
I dont think there's any real headway on government loans in terms of interest rate - the consolidated rate will be a weighted average of the individual rates, but then you'll have just 1 loan.

the private loans are a different story. I looked up sofi, which has good reputation, but their rate was only marginally lower than what I have now and not worth it to refi (given the hassle involved).

Careful though; government loans DO have better protections insofar as repayment, deferrals, etc.
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#4
Thank you for the responses.
Quote from Dr. J View Post :
I dont think there's any real headway on government loans in terms of interest rate - the consolidated rate will be a weighted average of the individual rates, but then you'll have just 1 loan.

the private loans are a different story. I looked up sofi, which has good reputation, but their rate was only marginally lower than what I have now and not worth it to refi (given the hassle involved).

Careful though; government loans DO have better protections insofar as repayment, deferrals, etc.
Thank you for the response. So in terms of refinancing. It is probably a better idea to keep the government loans and just refinance the private portion?

And Yes the private loans have higher interest rates than government loans.

And also in terms of refinancing the private portion, what are your opinions on fixed vs variable rates. I know the variable rates are lower than fixed for now, but i dont know the long term benefits.

Thanks
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#5
It will depend on how quick you plan on paying the loan off and how your credit it for the foreseeable future rates should be low figure 5 years. I would work as hard as you can to get the loan amount down to the point of living like a college student for a few years and put the $$ into paying off as much as you can.
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Quote from komondor View Post :
It will depend on how quick you plan on paying the loan off and how your credit it for the foreseeable future rates should be low figure 5 years. I would work as hard as you can to get the loan amount down to the point of living like a college student for a few years and put the $$ into paying off as much as you can.
Agreed, If you can get a lower rate because it is variable it might be worth doing that if you can commit to paying the loan down fast as possible while only paying the minimum required on the govt loans. Without knowing how much of your annual income is available to go towards paying down the loan it is hard to say if this will work for you.
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#7
figure you are making 120 and take home 80-85 about 30K should go towards your higher loans
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#8
Quote from hmnguyen87 View Post :
Thank you for the responses.

Thank you for the response. So in terms of refinancing. It is probably a better idea to keep the government loans and just refinance the private portion?

And Yes the private loans have higher interest rates than government loans.

And also in terms of refinancing the private portion, what are your opinions on fixed vs variable rates. I know the variable rates are lower than fixed for now, but i dont know the long term benefits.

Thanks

IT's a gamble. variable rates are typically, initially, set lower than fixed, but trend upward with time. So if you can consolidate and pay off the loans ASAP, then variable would be the way to go. IT depends on the spread as well - if you're only getting a 0.25% lower rate by going variable, is the $$ saved worth the risk of the rate jumping, and the possibility that you might not pay off the loan quickly?
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#9
thank you guys for all the responses. I think you guys made some really good points, definitely have enough to help me make a decision.
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#10
I'm finishing up nurse anesthetist school in just shy of two months so I have looked at this quite a bit. Typically the big three lenders for refinancing are Sofi l, DRB, and Earnest (relatively new). DRB has grown to the point that they are taking 3-4 months to close a refinance and their customer service is lacking. Both Sofi and Earnest have pretty good reviews.

I personally refinanced with Earnest about 6 weeks ago. Once you fill out the application you get a decision in 2 days which is nice. You can choose your payment which is helpful (the higher you want your payment to be the lower the interest rate). Refinancing saved me 1.5% off my rate and shaved a year off of my repayment plan making the same payment amount I would have if I hadn't refinanced.
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Last edited by acesmuzic March 31, 2016 at 05:25 PM
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