There was a moment after graduation where I wondered if it was worth it…
Was this degree I was holding in my hand really the ticket to future wealth and success, or was this $30,000 piece of paper going to be my financial demise?
It really didn’t matter what the answer was; all I knew is I wanted to get rid of that debt ASAP. So I dedicated my post-college years to one focused financial mission: to knock out my debt. And in less than four years, with sheer sweat and grit, I was debt free.
I used a lot of muscle and hustle to pay off that debt. So it didn’t even occur to me to look into refinancing my student loans. My interest rates seemed relatively low and I had planned to pay them off quickly. But the more I research it now, the more I realize that I could’ve saved a few hundreds if not thousand dollars if I had decided to refinance my student loans.
Too late for me, I suppose. But not for you 🙂
Refinancing Your Student Loans: Is it worth it?
If you feel like your interest rates are (literally) compounding your student debt problem, you may want to consider refinancing your student loans to a lower rate. But before you do, consider the pros and cons and refinancing.
CONS OF REFINANCING YOUR STUDENT LOANS
While a lower interest rate sounds incredibly appealing, there are definitely some downsides to refinancing. If you refinance your student loans, you may lose some protections associated with your federal student loans (like the federal loan forgiveness program). And if you lose your job, you won’t be able to claim financial hardship like you would before you refinanced.
PROS OF REFINANCING YOUR STUDENT LOAN
But refinancing can be a great option in the right situations. If you have a relatively steady job or financial situation but you’re stuck with extremely high interest rates, you may get some loan relief through refinancing, which will help lower your monthly payment and insure more of your money is going towards the principal and not interest. And if you combine a refinanced student loan with some serious money management habits in your personal life, you could be paying down your debt incredibly fast.
HOW TO REFINANCE YOUR LOANS
So is student loan refinancing feels right for you, just how do you go about doing it? There are lots of options on the market. You can start with your personal bank and ask them about student loan refinancing options. Or you can shop online. The student loan refinancing market is growing more and more as the student debt problem grows with it, and there are now many tech-savvy options for refinancing.
My favorite option I’ve discovered so far is SoFi. If you’re looking to refinance your student loans, SoFi offers variable rates as low as 1.90% and fixed rates as low as 3.50%. They also claim their members save an average of $14,000 when they refinance. And they have a great-looking, easy-to-use interface (which is more than you can say for other loan websites).
I’m a big fan of SoFi. I’ve watched them grow so much over the last few years from serving just grad students to opening up their doors to thousands of undergrads struggling to pay off their debt. I’ve also gotten a chance to meet the founder and the SoFi team; you can tell they’re genuinely interested in helping as many people as possible lower their student debt payments.
I’m part of the SoFi’s referral program, which means that if you’re interested in refinancing with them and you get approved, they’ll give you a $100 cash bonus towards your debt – a nice chunk of change to help you start paying down those loans! I earn a small commission if you decide to use my link – but so do you 🙂 And like I say on the rest of my blog, I only recommend products I love.
Bottom line on refinancing: If you want to lower your interest rates on your student loans and your financial situation is relatively stable, you may want to consider refinancing.
Interested in refinancing your student loans?Here are the top 6 lenders of 2017!
|Lender||Rates (APR)||Eligible Degrees||More Info|
|2.79% - 6.74%||Undergrad & Graduate||Visit Sofi|
|2.79% - 6.74%||Undergrad & Graduate||Visit Commonbond|
|2.67% - 7.26%||Undergrad & Graduate||Visit Lendkey|
|2.78% - 8.24%1||Undergrad & Graduate||Visit Citizens|
|2.81% - 6.39%||Undergrad & Graduate||Visit Earnest|
|2.99% - 6.99%||Undergrad & Graduate||Visit Laurel Road|