Medicine & Manicures

How To Refinance Your Student Loans


Hey y’all! I wanted to take a break from wedding and lifestyle posts and discuss a topic that I knew nothing about until my (now) husband educated me. 

Student debt. 



As you know I spent the last 2.5 years in grad school which was not cheap (shocker I know). I took out federal loans to finance my tuition and living expenses for my time in school. Ryan will tell you that he provided some loans too that he doesn’t ever plan on seeing again, but I told him a lifetime with me is a great return on his investment 🙂 Anyway, by the time I graduated I had 5 separate loans at 5 different interest rates ranging from 6-7.6 percent. Anyone that has bought a home in the last few years knows that home loans are right around 4% and under. That 7 percent-ish interest rate may not seem like that much but with a big balance and many years to repay it, you are talking about tens of thousands of dollars in interests payments. Yikes!!! Luckily that’s where SoFi comes in. 


Ryan likes to call himself the “CFO” of our relationship and let’s be honest, there’s always one person who’s more financially savvy. I want to give him a big shoutout for helping me with this whole process and also with writing this post! 

There are many companies that will refinance your student debt once you graduate and they can all be applied to online. I didn’t have to spend one second in a bank. Ryan did some research and found SoFi and Earnest to be two companies that offered the lowest interest rates. The applications themselves are pretty easy but here is a basic list of what you need to have ready:

  • Proof that you graduated
  • A recent billing statement (i.e. electric bill) to verify your address.
  • A statement for any checking/savings/retirements/investment accounts you have
  • Your current student debt
  • Any other outstanding debt (mortgage, credit card, auto loans etc…)
Basically, they want a snapshot of how much money you have and how much money you owe. The other piece of info they want is how much you are going to make with your new job- a recent pay stub or a signed offer letter will work. 

Once you have all of your info ready, the whole process can be handled online in a week or so. Here are some tips to keep in mind:
Fixed rate vs. Variable Rate
A fixed rate will never change. You pick how long you want to take to pay your loans (10, 15, 20 years…) and they will tell you how much you will have to pay. Your monthly payment will stay the same for the entire period of the loan. 

A variable rate is normally about 2% lower but can change once a month. This means your payment could go up or down every month. Interest rates have remained very steady over the past couple years so my current variable rate should remain lower than the fixed rate for at least several more years. And when the interest rate does move, it is a very small amount month to month. 

Whichever option you choose make sure to set up auto draft so that the money is taken out of your account automatically every month. The interest rate drops 0.25% when you do this. 

Get ready to make payments
Do not refinance until you are ready to start paying. Most federal loans give you up to 6 months to start paying but once you refinance with a private lender, they want the first payment in about 45 days. And then another payment every 30 days for the rest of your life (slight exaggeration). 

Just do it
Don’t be afraid to take this on yourself. The companies I mentioned have very knowledgeable people that can answer any questioning that you have. It is definitely worth your time. Ryan calculated that we will pay over $20,000 less in interest than if we would have just stuck with the federal loans. 

If y’all have any more questions about this process, don’t hesitate to let me know! I know this can be a daunting task but trust me, it’s well worth it in the end. And this is not a sponsored post, I just wanted to share some useful financial info with y’all 🙂


PS. If you like free handbags, don’t forget to enter the Urban Expressions giveaway here. I’ll announce the winner tomorrow & hope y’all have a fabulous day!





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Comments

  5. Joey Hodges says

    Yeah….so…we may have to pick y'all brains about all this. J has quite a bit of student debt still. Such a well-done post, friend!! Very proud of you!

    Reply

  6. Lauren Marie D. says

    Super important to know, and such a great post! I hope to share a similar one on my blog post-bar prep. My fiancé and I both have professional school loans amounting to an exuberant number well into the six-figure range so I sincerely appreciate the information.

    Lauren xo // The Right to Remain Fabulous

    Reply

  7. Laurel Toney says

    Hi Kristina,

    Laurel here from SoFi PR. I was delighted to hear about how we've been able to help you and Ryan save some serious dough! I'd love to learn more about your story – if you're up for connecting, please reach out to me at ltoney@sofi.com

    Thanks,
    Laurel

    Reply

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