Has anyone ever taken a personal loan to pay off student loans? Or something else? My grad school loans are ridiculous (thanks NYU) and we're paying 6.5% interest on them. I pay more than the required payment each month, but with that interest rate, it's hardly even making a dent in the principal. It seems like there should be a way to get a lower interest rate than that. Our mortgage is only 3.9%!
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We refi-d our house and paid some of DHs off...the interest is a much lower rate (dh had some double digits thanks to private law school) and the interest is deductible...if see about that option...
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Can you consolidate with a lower interest rate? That is what I did with a big chunk of my loans. That is a very high interest rate for student loans. I've always been told that student loan debt is "good debt' and when going to pay off debts to leave it for last, however with a high interest rate like yours I'd be looking into other options as well.
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I've found personal loans typically don't have better interest. That said, I refinanced my student loans with drb and have been extremely happy. Lowered my percent to 3
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Same as @gotkimchi: my DH refinanced his law school loans with DRB from like 7.85% to 3.something and his payment on a 10 year note was cheaper than the 30 year he previously had. We are paying more on it than the monthly and hope to have them done in the next 2-3 years.
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Asked my hubby on this one for you. He suggests you look at the total cost of getting a home loan like the origination fee. Then you would also need to take a look at the amortization for the school loan vs personal loan.
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We consolidated through SoFi and went from 6.8 to around 4% interest which has been huge! I think there may be some kind of referral thing to save you money I could try and find a link if you want. But I would look into consolidating/refinancing options first.
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Definitely consider refinancings those loans. You should be able to get a better deal on interest than that from some of the other student loan companies out there.
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Another vote for looking into refinancing/consolidation. I recently refinanced my student loans through DRB. The amount of money we're saving over the life of the loan is INSANE.
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Most personal loans even with great credit aren't going to be lower than that.
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I would try consolidating if you can. I did it awhile back (like 10 years ago now) and I got down to a 2.75% rate. I also had some other student loans that weren't consolidated that had a higher rate, and for those, I borrowed money from a family member to pay them off and then paid them back at a lower rate over 5 years. The original loan was a 30 year one so the lower rate plus the fast repayment schedule saved me a ton of money. That worked out well but I know that's not an option for most people.
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I consolidated mine at a low rate. Definitely try some of the suggestions to get a lower rate, if you can.
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We have med school and grad school loans that are all at about that rate. We've been leaving them alone because they are government loans so we have been able to do income based repayment plans while my husband is in residency. When he starts his job in July we are planning to refinance, possibly with SOFI.
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One thing to think about is that at death or disability your student loan is forgiven - this is not the case for other personal loans. You can protect yourself from the death aspect by getting a term life insurance policy for the length of the loan (assuming the cost of the policy still makes it a financially a better deal) and the disability with a disability insurance policy (assuming you work).
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Thank you everyone. Definitely going to look into refinancing right now. It's really painful to pay over $600 a month and not see the balance going anywhere
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@SeptMomma12: one thing - if your husband also has loans do not do a marriage consolidation. While your loans die with you if they are separate, they live on for the other spouse in the case of a marriage consolidation. That's another thing to consider for any kind of personal or home loan.
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