How I Refinanced My Student Loan Debts

 

By Patrick Moran, Yale ’11

Student Loan Debt Consolidation RefinancingLet’s take it back to 2012. I was fresh out of college, sitting on $50,000.00 of student loans. Each year for the previous four, I would resubmit my FAFSA and a few months later more debt would amass. I delightfully ignored the numbers, thinking to myself, “why worry about those? Employers pay those off, right? They were Stafford loans, and if I got them from the Department of Education, they can’t be that bad.”

Needless to say, it was easy to disregard the loans, and it was comfortable to let the $180 debit come out of my checking account each month to pay them off. I left it there. Refinancing hadn’t crossed my mind.

But, after a few months of hearing about how interest rates were at an all-time low, I began to consider my options. After all, if interest rates were as low as they were, lower than when I originally took out my loans, I would be dumb not to seize the opportunity.

Crushing DebtMy credit wasn’t great. Two years of buying rounds in college and other financial irresponsibilities had earned me $18,000 in credit card debt, and that was going to require some clean up. The first step was checking the interest rates on all of my loans. The highest rates were credit cards, so I began to take advantage of promotional interest rates and shift around my credit card balances to eliminate the interest rate payments.

After a year or so I managed to pay down the credit card debt, but the shocker was that those subsidized loan interest rates that I had been so confident were super low were actually near 15%, higher than many credit cards! I was bound to be paying nothing but interest, carrying a boat load of debtm for the next 25 years-something that would prove to be a major obstacle when it came to buying a house.

I had to do something, and I began to research my options.



After plenty of time googling and trying to gather as much information as I could, I applied to three different lenders to see what rates they could offer me.

I’ll cut to the chase, SoFi took the cake. I received an interest rate of 4.75% after signing up for automatic debit. I opted to consolidate and refinance all of my student loans that were above 6%. A year and a half later I had $5,000.00 paid off, I was feeling good. I was able to take advantage of the low-interest rates and made a sound financial decision to get my personal debt under control.SoFi logo

I can’t guarantee what your interest rate will be, but it’s worth checking out. At the time of writing thi Sofi is advertising rates as low as 2.14%. To put it in perspective, they were advertising 3.75%, when I applied.

You can follow this link to check your rate now.


For the sake of transparency, I’m signed up for the SoFi referral program, which is available to all SoFi members who have refinanced their loans with SoFi. That fact though hasn’t influenced my decision to recommend SoFi, though. They’re the real deal.