Anyone refinanced recently?

[GoodLife]

My husband just finished his fellowship in June and started his first "real job" in July.  He's been in the process of refinancing with Sofi for the last few months, but the process hasn't been all that smooth (for the last while they have had the wrong loan amount, keep sending him docs to sign without putting the right loan amount first, none of the numbers matched up for a while, etc).

Anyway, all the numbers finally match up but the interest rate doesn't seem very good at all.  They have quoted him 4.865% for a 10 year loan, and not much better for a variable loan.

We plan to have them paid off in 2-3 years, but it's still disappointing (although still better than the current 6.8% they are all at now).  Should we keep looking around, or sign up with them now and then start looking again for a better rate with someone else?  Has anyone gotten a better deal elsewhere, recently?

For reference, he has about $240k in loans.  He makes around $350k and we have no other debt, and we are renting a small place for now (so, no mortgage).  Credit score in the mid 700s.  I guess I thought that all those factors would give us a pretty good rate but it didn't seem to help.

Thanks!

[Zaphod]

GoodLife wrote:

My husband just finished his fellowship in June and started his first “real job” in July.  He’s been in the process of refinancing with Sofi for the last few months, but the process hasn’t been all that smooth (for the last while they have had the wrong loan amount, keep sending him docs to sign without putting the right loan amount first, none of the numbers matched up for a while, etc).

Anyway, all the numbers finally match up but the interest rate doesn’t seem very good at all.  They have quoted him 4.865% for a 10 year loan, and not much better for a variable loan.

We plan to have them paid off in 2-3 years, but it’s still disappointing (although still better than the current 6.8% they are all at now).  Should we keep looking around, or sign up with them now and then start looking again for a better rate with someone else?  Has anyone gotten a better deal elsewhere, recently?

For reference, he has about $240k in loans.  He makes around $350k and we have no other debt, and we are renting a small place for now (so, no mortgage).  Credit score in the mid 700s.  I guess I thought that all those factors would give us a pretty good rate but it didn’t seem to help.

Thanks!

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Im not exactly sure exactly what the underlying structure for their fixed loans is, I have a variable and its fixed to libor + a margin. Libor has been increasing quite a bit over the last year due to structural reforms that will come into effect in October, but dont know if this applies to their fixed product. However, I was a bit shocked at their advertised rates still being very low when everywhere else they have noticeably moved up.

Have no idea what is required to get the best rates, but its always the 5 year that is the advertised rate and then comes credit etc....I also did a 10 year term and it was about 1% more than their lowest option, do have a mortgage and credit score is high 7/low 8.

[conniebird]

Not sure either. Prolly has to do with the amount of debt to salary and possibly speciality. . Consider variable since you're planning on paying them off so quickly. I just refinanced a loan with sofi but it was a much smaller amount $28k and I got 2.4% variable. They give an extra 0.25% deduction with autopay

[GoodLife]

Thanks, everyone.  We called Sofi back this afternoon and they quoted us in the 3's for a variable 10-year rate.  I think we will go with that and still pay it down as quickly as we can.  Much better than the almost 5% we had before.

[somethingmorethanfree]

Have you checked with Earnest? I've found their rates to be better than Sofi recently.

[somethingmorethanfree]

Also, if you plan to pay in 2-3 years, why not finance for shorter term to get a better rate? Maybe 6-8 years?

[abrownpeds]

I was really surprised at the rate... I just refinanced through SoFi for a similar amount after graduation. My rate was also in the low 3's, but I went with a 7 yr variable.

For anyone else with issues with Sofi - their phone customer service is fantastic and very efficient.  I had some similar issues with things feeling slow with the processing, but all it took was a quick call and everything fell into place quickly after that.

[nolamd84]

Just refinanced principle of 190k with credible.com and eventually CitizensBank. Got 2.45% variable 5-year. Was happy with that. Was way lower than what I got from SoFi.

[GoodLife]

Thanks everyone for the info, we will look into a few more places before signing with Sofi, just to see if anything better is out there.

Sofi did give us a slightly better rate for a 5-year variable, but my husband would rather go with a variable 10-year for the payment flexibility (not such a high monthly commitment).  We still plan to make large lump-sum extra payments every few months toward the principle, hopefully getting rid of the loan within 2-3 years if all goes according to plan.

[Zaphod]

GoodLife wrote:

Thanks everyone for the info, we will look into a few more places before signing with Sofi, just to see if anything better is out there.

Sofi did give us a slightly better rate for a 5-year variable, but my husband would rather go with a variable 10-year for the payment flexibility (not such a high monthly commitment).  We still plan to make large lump-sum extra payments every few months toward the principle, hopefully getting rid of the loan within 2-3 years if all goes according to plan.

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If you make larger extra payments you are effectively reducing the interest rate anyway. Why not pick a term/mo amount that you feel safe with and contribute extra to reduce the effective rate.

[MochaDoc]

GoodLife wrote:

Thanks everyone for the info, we will look into a few more places before signing with Sofi, just to see if anything better is out there.

Sofi did give us a slightly better rate for a 5-year variable, but my husband would rather go with a variable 10-year for the payment flexibility (not such a high monthly commitment).  We still plan to make large lump-sum extra payments every few months toward the principle, hopefully getting rid of the loan within 2-3 years if all goes according to plan.

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I'd mosey on over to the following link (https://www.whitecoatinvestor.com/new-players-in-student-loan-refinancing/), armed with an empty excel spreadsheet (helps you keep track of the estimated interest rates, estimated monthly payments, duration, type of loan and whatever else you feel is important) and request quotes from all eligible companies. Go with the one that best suits your needs.

I recently did this and ended up refinancing with Earnest. A bit invasive, they ask for passwords and usernames for your financial accounts, but well worth it in my opinion. I'm super happy with my decision.

Best of luck.

[MochaDoc]

Just to be clear, the 2-minute quote from Earnest does not require passwords and usernames for various financial accounts. They only ask for that information if you decide to submit a complete application.

[The White Coat Investor]

Lots of my readers are refinancing with SoFi and Earnest every month. There is often a bit of hassle getting all the paperwork in and right, but it seems to get better as time goes on. The shorter the term, the better your debt to income ratio, the better your credit and variable < fixed seem to give you the best rates. Some people do get the lowest possible rates, but most do not. As long as you're not going for forgiveness, even a small decrease in rate is worth it.  Just remember that you get rid of loans by throwing money at them, not by refinancing them! Refinancing helps save a little interest, but living like a resident/fellow is what makes them go goodbye.

[soundbyte]

MochaDoc wrote:

Just to be clear, the 2-minute quote from Earnest does not require passwords and usernames for various financial accounts. They only ask for that information if you decide to submit a complete application.

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I dont understand why they require such "linking". It's a huge security risk. I understand there are banking APIs and sites like Mint.com and others use similar tactics, but I personally don't feel comfortable linking all relevant financial accounts just to get a quote. Seems very excessive. I'm more than happy to send over account statements, but "linking" seems too invasive for my tastes.

I just emailed them to ask if I could apply without linking the accounts...waiting to hear what they have to say.

[MochaDoc]

soundbyte wrote:

MochaDoc wrote:

Just to be clear, the 2-minute quote from Earnest does not require passwords and usernames for various financial accounts. They only ask for that information if you decide to submit a complete application.

Click to expand…

I dont understand why they require such “linking”. It’s a huge security risk. I understand there are banking APIs and sites like Mint.com and others use similar tactics, but I personally don’t feel comfortable linking all relevant financial accounts just to get a quote. Seems very excessive. I’m more than happy to send over account statements, but “linking” seems too invasive for my tastes.

I just emailed them to ask if I could apply without linking the accounts…waiting to hear what they have to say.

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"I personally don’t feel comfortable linking all relevant financial accounts just to get a quote."  Linking financial accounts is not required for the 2-minute quote; only for the full application.

That small clarification aside, I understand your concerns. I'd recommend changing your passwords to a generic, memorable, secure password for your Earnest application and then changing them back once you receive Earnest's decision.

I don't think Earnest's encryption methods, etc. are unsafe but the security risk is not zero. I immediately changed all but two of my account passwords after receiving my decision; two of my credit cards are still linked and I've noticed no suspicious activity.

I wasn't able to link my highest balance bank or my retirement/brokerage accounts and they did ask me to upload PDF copies of the latest statements prior to completing my application review so your request will likely be honored.

Knowing what I know, now that I'm on the other side of the application process, the risks are worth the rewards that come with getting Earnest refinancing approval. I'm a bit of an Earnest fan(atic) so I am biased but my financial life is much improved with Earnest as my new loan servicer: interest savings (~20k) due to interest rate reduction (3.75% fixed, 5-year v. 6.8% fixed, 73 mos. remaining), further IR reduction due to autopay (down to 3.5% v. 6.08%) and biweekly scheduled payments (5-year reduced to 4.5 year repayment schedule). Choosing your rate type, payment amount and corresponding interest rate instead of being told what and how much with the ability to change the payment amount (with corresponding rate change) initially and throughout the life of your loan. You're encouraged to refinance with them again after six months of timely payments if your rate is higher than the lowest ones currently available/advertised. Making extra payments is super easy and you don't have to jump through hoops to get them and your regularly scheduled payment applied in the same payment cycle. Loans are forgiven at death. The ability to switch between fixed and variable rates (haven't tried this, yet). I could go on and on but I won't bore you.

Best of luck with your request and your application, soundbyte.