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Any Reason Not To Refinance My Student Loans?

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  • Any Reason Not To Refinance My Student Loans?

    Decided to look into refinancing my student loans which is something I hadn't given much thought to since starting residency.

    A little info:
    Late 20's, halfway through surgical subspecialty residency with plans to do a 1 year fellowship afterwards.
    Currently on standard 10 year repayment plan. I have 4 loans, all of them federal. Balance is $120,000+ as it stands now. Average interest rate is 5.56%.

    I went through NerdWallet and found a few general offers. I looked into the offers from Earnest a little further and they are showing I'm prequalified for fixed APR of 3.09-4.82%, variable APR 1.89-4.46%. I haven't completed the official application for them yet.

    Any reason not to do this? My plan has always been to make the monthly payments through residency and then pay the rest off in chunks over 2-3 years once I'm out in practice. I'm debt averse and these loans are the only debt I have. I want to be debt free by my mid-30's. Only down-sides I can think of are 1) if there is a penalty from Earnest for paying the loans off early and 2) PSLF would no longer be an option (although I've never really considered this likely with the specialty I'm going into).

    Thanks in advance.

  • #2
    You must be married to a decent earner if you are on standard repayment (otherwise it’s weird not to be on repaye getting the subsidy - by my calculation that would have you in the low 4% effective rate). not much of a reason not to refinance if the rate is lower and the longer you wait the more money wasted assuming the offers are better than current rate.

    shouldnt be any penalty for paying early, but read the fine print as always.

    on not being able to pslf - you should realize that if you are on standard repayment plan, there is no pslf. That’s the literal definition of 10 yr standard plan - there’s nothing left to forgive since you paid it all, so don’t lose sleep over that part of the equation.

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    • #3
      Really, the biggest downside is losing the potential to have your loans forgiven. However, it sounds like you haven't been doing that, so no, I don't see any downside. It'll save you a few thousand dollars.

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      • #4
        Use this link and get a rebate. WCI vendors. Look at the table at the bottom.
        https://www.whitecoatinvestor.com/st...n-refinancing/

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        • #5
          Does anyone know of any online calculators to determine what the payoff would be at certain point during a loan term based on monthly payment, APR, and term?

          For instance, if I'm planning to pay off the loans in large chunks with my attending salary in ~5 years, I would like to be able to compare how much of my loan will be left at that time based on those variables. Earnest approved my loan refinance application so just trying to find the sweet spot.

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          • #6
            You are looking for a loan amortization table.
            Lots online. Depends on your extra payment.
            https://www.bankrate.com/calculators...alculator.aspx
            You do know excel has a lot of templates available.

            The prelims you get may not be the actual offer as well. Suggest you plan on applying through two vendors at least on WCI.
            Play one against the other. Since you already have the documents gathered. They will compete sometimes.

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            • #7
              Originally posted by Tim View Post
              You are looking for a loan amortization table.
              Lots online. Depends on your extra payment.
              https://www.bankrate.com/calculators...alculator.aspx
              You do know excel has a lot of templates available.

              The prelims you get may not be the actual offer as well. Suggest you plan on applying through two vendors at least on WCI.
              Play one against the other. Since you already have the documents gathered. They will compete sometimes.
              Thank you!

              Comment

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