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The refinance on my student loans went through! Having student loan debt has probably been one of the most complicated things for me to figure out on my debt free journey. When I started my journey, I had about $7,500 in debt in my own name, but I also had student loans in my dad’s name. They were “parent plus” loans, which ultimately means that my dad was technically responsible for the payments on them. However, I knew when I took them out, that I was ultimately responsible for making the payments on them.
When I started looking into my student loans more, I realized my interest rate was high. I was paying 7% interest on $25,000+. It ended up calculating out to $8 a DAY in interest. (I took these loans out in 2014). I don’t regret taking out my student loans, even though I don’t have my degree yet.
First, I started with ton of research online. Actually, almost 2 months worth of research and all of it brought me back to one company. So I finally decided to refinance my student loans through SoFi, (Social Finance).
Why did I refinance my student loans?
1) They were in my dad’s name. Because I have been throwing all of my money at them, I have paid off about $3,000 in interest off in the last year. When it comes to taxes this year, it will all go to my dad’s name instead of my own. Ultimately, it is fine, but that tax break would have went right back towards my debts.
2) My credit score had gone up 120+ points since I had originally took out student loans. This helps because when I took out loans, I had almost no credit. I didn’t get approved for very much, but my dad did. Now that my credit went up, I can actually get approved for the amount that my education costs.
3) 7.4% interest rates. Refinancing it brought it down to just under 6% interest, which is a pretty decent savings over “the next 7 years” that the loan is set for. I will have it paid off in the next year.
4) Credit score and future mortgage. Once my student loans are all paid off, I plan to start the search for a home. When I look at mortgages, it will open up better deals and more money saving opportunities for me than I would have otherwise.
5) I know that Uncle Dave (Dave Ramsey) says that you can’t pay off debt with more debt, but refinancing for own reasons just made more sense to me. It did end up consolidating the two loans that I had left, but both of them are at a lower interest rate.
Why I chose SoFi to refinance my student loans?
1) They offered a ton of different payment plans, interest rates, and different options all together. Their plans were really great.
2) Their customer service was remarkable. I called multiple times in an attempt to get my dad on my account as a cosigner, making sure I had the right paperwork and a few other things. Every single time I called, I got a different person and they were all incredibly helpful and knowledgeable about what I needed. They were so polite and kind. When I was missing a document, they even called me to let me know what they needed from me because that was the only document they were waiting on.
3) They have extremely competitive interest rates. I searched around for a few different rates, but ultimately, SoFi was either a better interest rate or an overall better program. Multiple bloggers had nothing but great things about SoFi student loan refinance.
4) Their application process is insanely straight forward. It is all online and incredibly easy. Each step tells you exactly what it needs from you, making it fool proof to get it done. When you enter your phone number, they send you text messages about every status change on your application.
5) Referral program. I would be lying if I didn’t say that their referral program wasn’t an incentive for me. Affiliate links are one way I make money as a blogger. If you want to know more check out my disclosure policy or my guide to making money as a blogger. I never recommend products I don’t believe in, but having a program where I can get paid to tell other people that I love their services was a small incentive. If you sign up (and get approved) through my link for your refinance, you will get a $100 welcome bonus from SoFi!
Refinance right for you?
1) Is your debt in someone else’s name? (Rare, but still a great time to take charge of what you are responsible for!)
2) Did your credit score dramatically improve since your took out the loans?
3) Do you have a high interest rate or could you get a lower one?
4) Are you going to be working on getting out of debt for a while?
Personal finance is ultimately personal. You should make your decisions based on what you think is right. Deciding whether or not refinancing is the right decision is the same, a personal decision based on your finances. The more I looked into SoFi, the more I knew to refinance my student loans through them. It was the right decision for me for a ton of different reasons. I look forward to paying off these loans, in my own name. It was right for me, but is it the right decision for you?