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Refinance student loan? (Federal->Private)

Posted: Tue Dec 05, 2017 2:37 pm
by ParlayBogle
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 Sofi.com 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.

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

Posted: Tue Dec 05, 2017 2:44 pm
by EricaInvestPink
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.

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

Posted: Tue Dec 05, 2017 4:11 pm
by seamonkey
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.

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

Posted: Tue Dec 05, 2017 6:03 pm
by dentoid
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.

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

Posted: Tue Dec 05, 2017 8:34 pm
by cosmonaut
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.

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

Posted: Tue Dec 05, 2017 10:23 pm
by stevekozak2
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?

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

Posted: Wed Dec 06, 2017 11:42 am
by Open Wide
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.