Refinancing question

[jowenmd]

Hi,
I currently have about $250,000 in debt with FedLoans. I decided on a job that isn’t eligible for PSLF so I’m refinancing. Currently, the best rate I’ve been offered is from a credit union through Lend Key (2.21% on 5 yr variable) but the max is $170,000. Next best is 2.63% from College Ave thru Credible on $250,000. I’m waiting to hear from Earnest but their stated range is 2.34-3.76% so Lend Key would still win. Should I refinance $170,000 of the debt with Lend Key and then refinance the rest with another company? Common sense says “yes” but I’m wondering if that is allowed. Or if it might be more trouble than its worth down the line. This is all new to me so appreciate any insight!

Thanks,
Jennifer

[hightower]

I think the difference between 2.63% and 2.21% is negligible if you're planning on paying them off quickly.  Is the Credible loan a fixed rate?  If so, go with the fixed rate.  Get a fixed rate and stretch the payments out as long as possible.  That way you have the flexibility to pay less if you need to each month. Make sure there's no pre-payment penalty.

Do you have an emergency fund saved up yet?  Do that before paying extra towards the loans.  3-6 months living expenses is recommended.  Then, just start pouring money into the debt.  If you can get an ultra low rate like that, I would make sure you're also maxing out your retirement accounts each year while you're paying down the debt.  Put the full 18k into your 401k and open a backdoor roth and put the $5500 in there each year too.  Good luck!