I graduated from Penn State University in May of 2009 and I finished school with roughly ~$40,000-50,000 in debt (yeah, I know, ouch.) That said, I embarked on my working life by starting a job with the PA state gov’t as a clerk typist. The compensation is fair, but by no means where I want to end up. That said, I do plan on making a career out of public work.
The fed. gov’t has a loan forgiveness program, in which I plan enroll once I have completed the 10 years of service. This allows me to pay a lower rate. The repayment period of the loan obviously increases, but the remaining balance will be forgiven assuming I make payments on time for a decade and maintain my career in government work.
My private loans, however, are just brutal. I have one in particular that is handled by Chase bank. I can’t recall the interest off hand, but it’s upwards of 6-7% (if I recall correctly, anyhow).
My credit score is 746 (FICO, not sure how prominent that is anymore), as I’ve been financially responsible after graduation. I live on my own making ends meet, and I make sure to never miss a payment or allow myself to get behind.
Any ideas on how to lower the rate of my private loans? Any banks/financial institutions in mind that allow refinancing of private student loans?
No firm answers here, but try calling your local credit union and asking what they can do. 7%+ is a terrible rate for someone with good credit like yourself.
I have a similar credit score, and the one private education loan I have that originated in 2008 has a stupidly low rate, like 2.8% (I think it may be adjustable though).
Why limit yourself with an administrative government job. If your employer can increase its revenue, via taxes, when costs get too high, why can’t you? You have a college degree. Get out there and demonstrate your worth to some private sector employer and knock there socks off…move of the corporate ladder and pay off those loans with your bonus instead of worrying about your interest rate.
After I took an early retirement, I got another job as a clerk. I made $16.00 an hour and I live pretty cheap. I managed to save $30,000 in 3 1/2 years. Slammed that into the bank. I only paid $510.00 as a mortgage payment and don’t own a car, but other than that, I still had lots of dental work, took trips, bought things and I lived off that $16/hr.
So it’s doable to save money if you really want to. My advice is find a cheap flat with a room mate and pay no more than $500 a month for rent. Go to a city where you don’t need a car like Chicago. Then live cheaply for the next three or four years and bank as much as possible and get that loan down.
Have you looked online?
I went to Wells Fargo, looked up their student loans, and they are showing options at lower rates than you have.
A couple of other ideas -
Do you have anything to offer as collateral? Secured loans are often less than unsecured loans.
Is there anyone willing to co-sign? Of course, now they are on the hook if you default.
I’m not a huge fan of your posts, and this is why. I’m sure your advice was offered in earnest, but at least try to give something related to the OP. It’s in political science.
I’m completely okay with making a career in public work. Different strokes for different folks. I also have no intention of making a career out of a clerical position. Nowhere did I even say that.
Yeah, I’m already living for $415/mo. in a 1-bedroom apartment which is 10 minutes from my job. Unfortunately, I’m banking most of money right now to assist my fiance in the immigration process. I have $3,000 socked away and I am able to save a decent amount each month. I appreciate the advice. ToC, I think my father has co-signed on the private loans, but I’m not sure. I’ll have to ask him. Something tells me that he didn’t, though, so that might explain my rate.
Also, there are many different lines of work in the public sector that require a college degree. I enjoyed my field of study and would not trade it for anything. Government work is a solid choice since many jobs often accept general degrees.
I’m only making $14/hr. presently, but the CoL is very low in my area and allows for some breathing room.
Do you have access to several good credit cards? If you have good credit, you can split the loan into several different cards offering 0% interest. You have to repay them within a year, but you should be able to find more 0% offers at that time, and then you just move them again. In the meantime, throw every single dollar you can spare at the loans.
Only do this if you are immaculate with your budget and recordkeeping, and have no indication you may be fired. Read every word of every offer, and then call them to verify before you transfer anything. But if you can do it, it can work. We’re transferring our second mortgage to be split between three cards, and should have it done within the year. Much better than the 26+ years that are left on it.
I get pretty consistent offers for 0% intro APR for X months (usually 12-16) which is probably based on my credit, but I’m not sure if I’d want to take a risky path like that.
There’s also a balance transfer fee on most of the cards I’ve been offered (usually like 3%) which I’m sure applies to loans as well?
I just don’t think my income (and savings capability) would be high enough to blitz through them like that.
You might check and see whether you have the option to consolidate your loans through the federal student loan program-- great rates and payment plans.
I’ve already consolidated my fed. loans and I’m currently repaying them on the income-based plan (ideal for a low-income borrower). That said, after 10 years the debt will be forgiven provided that I continue working for the government. Can you consolidate your private loans into the same program? Not necessarily the forgiveness, but I didn’t think you could.
This sounds really interesting. Would you consider starting a new thread on it, maybe detailing how you even thought of this decision, how you interacted with the bank to get it off the books and onto the 3 cards, what cards you’re using and which you plan to use (if any others in the future), etc.
Avoid the bit with the credit cards - make one payment one day late and you’re slammed with a MUCH higher interest rate.
Not sure I’d try the thing with the mortgage that Sateryn76 mentions: you’re surely getting hit with a transfer fee - why not just pay that much extra on the existing loan???
It is possible to refinance student loans - when I googled “refinance student loans” I got a number of hits. Some of which were from sites I’d never heard of, but there might be some useful info here:
This is a few years old but also discusses it at a high level:
The important question is whether these are private loans or private student loans. If they’re true student loans then they’re still backed by the government and can be consolidated with your existing consolidation loan.
Even if private, then they may qualify. FAQ from the direct consolidation page:
“Borrowers who do not have Direct Loans may be eligible for a Direct Consolidation Loan if they include at least one FFEL Loan and have been unable to obtain a Federal Consolidation Loan with a FFEL consolidation lender or have been unable to obtain a Federal Consolidation Loan with income-sensitive repayment terms acceptable to them or intend to apply for loan forgiveness under the Public Service Loan Forgiveness Program.”
I think the last condition is your entree, since that sounds what you’ve described.
Full disclosure, I used to work on a DoE contract for federal aid, and the federal consolidation program always seemed the best way to go. Further, I have personally consolidated twice, and am getting ready to do so a third time. FWIW, my first consolidation wrapped up direct, private, and Perkins loans.
Well, our second is $38,000 at 7.725%. We have 26 years left, so at the end of the term, we’d repay something like $86,000 on that loan at the current monthly payment. If we paid our extra income into that loan, we’d pay about $1600 in interest until it was paid off.
At at 3% balance transfer fee, we’d pay an extra $1140 (and I currently have an offer for a 2% fee at for 15 months, which would be $760.)
Either way, we’d save money. Plus it would be paid off sooner, and the temptation to make less than the maximum we could pay every month would be gone, since we have a deadline.