Student Loan Hustle

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I just saved $122,728 with a private student loan refinance!

I sound like one of those SoFi ads on TV.  But honest and true, this is real.  I couldn’t be more pleased with the decision I made to refinance out of my loan with FedLoan Servicing.  Using the refinance calculator, you can see that my interest savings is huge over a 20 year life of my loan:


My new loan is at an interest rate of 5.6% versus my old loan was at 7.375%.  This makes for a payment of $3395 per month.  Unfortunately due to my large loan size, I was unable to refinance into one loan, but rather now I have three smaller loans each at a balance of about $163,000.  Thankfully though, the lender treats them as one loan in regards to the payment schedule and when displaying the loan balance.

My experience on the entire process is completely a positive one.  I applied online, submitted some of the requested documents thru the lender’s website and the next thing I knew, I was e-signing the loan docs.  The process couldn’t be more convenient, simple, straightforward and easy.  The lender I decided on was Laurel Road.  Here is my actual account summary:

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Keep in mind that there are many many lenders out there when you enter the private student loan sector.  In my opinion they each offer very similar things and rates.  I was happy with a rate of 5.6% considering I opted for a 20 year amortization. While that seems daunting, you have to keep in mind that these loans likely do not have a pre-payment clause, and you may pay down the balance sooner than 20 years.  With such a hefty monthly payment, I opted for the longer term and a higher rate so that my monthly obligation was lower.  I would like to hopefully pay this in 10-12 years, but I do not want to be committed to making a $5000 monthly payment.  In this way, I will also keep my debt to income ratio down in case of the need to qualify for any new loans in the future, i.e. mortgage or car.

I’m sure you have seen advertisements for student loan showing 2.99% interest rate, or something enticing.  Keep in mind that these are probably variable rates.  I did not choose on a variable rate because I have a very large loan balance and cannot take that sort of risk.  Also, my loan term will be very long.  If you have been watching the news, you will know that the Fed’s have been slowly raising interest rates ever so gently in the last year.  Considering my loan is in it for the long haul, rates could be sky high in a few years from now.  Better to lock in now.

So that is basically it regarding the details of my new private student loan.  If you would like to refinance your student loan, please consider my previous blog post on leaving public service loan forgiveness before you make a final decision.  Any time you refinance out of a federal student loan, there is no turning back and you forfeit all the benefits of a government loan. If you have made your decision, and would like to also use Laurel Road, then please use my referral link: Yes, I do receive a monetary referral from them if you do so.

Dr. J

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