Refinance student loan? (Federal->Private)

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
Topic Author
Posts: 75
Joined: Mon Jun 11, 2012 9:01 pm

Refinance student loan? (Federal->Private)

Post by ParlayBogle » Tue Dec 05, 2017 2:37 pm

Wife has $11.8k in Federal student loans at 6.25%. She's on a flat repayment plan of $143/mo which puts her payoff in about 8.5 years. We looked at last night and she got an offer to refinance into a 5 year at 4.5% which makes her payment about $210/mo.

As I understand, the only downside is you lose some of the Federal protections like forbearance, forgiveness, etc. None of these are likely to apply in our case.

Any experience, advice, comments, etc are welcome.

User avatar
Posts: 18
Joined: Mon Jan 16, 2017 1:18 pm

Re: Refinance student loan? (Federal->Private)

Post by EricaInvestPink » Tue Dec 05, 2017 2:44 pm

If no federal repayment plans (IBR, REPAYE etc) or loan forgiveness apply to you, then definitely refinance to a private lender. You can compare Sofi vs Luarel Road (previously DRB) for who can give you a better rate.

Posts: 194
Joined: Fri Oct 19, 2012 8:55 pm

Re: Refinance student loan? (Federal->Private)

Post by seamonkey » Tue Dec 05, 2017 4:11 pm

It probably makes sense. Are there any fees? If you’re able to make a larger monthly payment, calculate how much would be saved paying at that higher amount at the current rate and if you refinanced. Factor in any fees that can be the cost of the refinance and you’ll be able to determine which option is a better one.

Posts: 13
Joined: Mon Feb 08, 2016 7:31 pm

Re: Refinance student loan? (Federal->Private)

Post by dentoid » Tue Dec 05, 2017 6:03 pm

Refinanced with SoFi twice.
They make it an extremely easy process, first time received a bonus of 300$. No refinance fees. No reason not to if protection from federal loans does not apply.

Posts: 19
Joined: Mon Jun 19, 2017 5:02 pm

Re: Refinance student loan? (Federal->Private)

Post by cosmonaut » Tue Dec 05, 2017 8:34 pm

I refinanced $150K grad school debt with CommonBond (got slightly better rate than SoFi). (I think SoFi and CommonBond are the most common private lenders for this....and it's worth seeing what rate each will give you. If you meet the qualifications, First Republic will give you the best rate to my knowledge, though there are logistical hoops to jump through.) I refinanced again with CommonBond after a year. I was 99% certain I would never need the federal protections...losing them is the only downside I see.

Posts: 70
Joined: Sun Dec 25, 2016 12:38 pm

Re: Refinance student loan? (Federal->Private)

Post by stevekozak2 » Tue Dec 05, 2017 10:23 pm

11.8k? Why don't you just buckle down and get it paid off quickly so you can put ypur money to work for ypu, instead of messing around for 8 years flipping interest rates?

Open Wide
Posts: 6
Joined: Mon Aug 01, 2016 3:02 pm

Re: Refinance student loan? (Federal->Private)

Post by Open Wide » Wed Dec 06, 2017 11:42 am

I have refinanced with both DRB and then again with SoFi, and found that the process with SoFi was very easy. You can usually get a bonus of some sort out of them too, and an additonal .25% reduction if you set up auto pay. I would do it again.

Post Reply