Student Loan Consolidation Question

[ABCPharmD]

I'm graduating in May and I have a few questions about loan consolidation. My first is how do you find the best interest rates for consolidating your loans? Do most people just go with their banks, or do they shop around? Also, this is probably a dumb question but do you still get the grace period if you consolidate your loans, and are you still eligible for things like income based repayment? I'd ideally like to bang out my loans in 5 to 7 years even factoring in if I do residency next year. I know people might think that it's impossible to knock out 200 k that quickly but hey I'm going to try! Any other loan repayment tips are appreciated.

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[abcpharm]

If you in Cali , inbox me


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[ldiot]

I heard SoFi is good from a few people. The thing is to consolidate your loans you will have to show proof of income, so I don't think you can apply right away when you graduate; you would probably need to work for at least a few months before you apply. So in this case just consolidate them when your grace period ends. You will still obviously be gaining interest during the grace period BUT the interest isn't added to the principal until the grace period ends so at least you will be able to consolidate before the interest is capitalized. I wold still recommend making aggressive payments during the grace period once you start working and given the size of your loan fixed interest is probably the better/safer option when you do consolidate, because who knows what the rate will be in 5 years.

 

[ldiot]

Double post-

 

[ABCPharmD]

If you in Cali , inbox me


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I'm not in Cali, but I like that our usernames are almost the same.

 

[MatCauthon]

Darrien Rowayton Bank is who I used for my consolidation. They have a great rate.

First Republic Bank is the consolidator I would look at.

 

[FarmD711]

I applied with SoFi and DRB and had the best interest rate and easiest process with SoFi. Happy with it so far...been about 9 months.

 

[DesiRX]

what are everyone's interest rates like? i am repaying at 6.8% right now. about 33K left to repay, graduated in 2012 but i had two other degrees (BS and MS) from before. Some of my friends that graduated (undergrad) a yr before me consolidated at 3.5%


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[bp2313]

I'm going through that process with DRB right now. It's taken almost 4 months but they offered me a lower rate compared to Sofi. As to answer your question about losing the IBR option, a quick search on pros/cons of refinancing student loan will do. I understand you want to pay your loan quickly, but I strongly recommend to wait a minimum of 6 months at your job before actually finalizing the consolidation. The reasons are passing your boards, income verification, moving due to job, hours cut, etc. I have known ppl in my class who failed the board, had mismatched name on ATT (had to wait 3 months to retake), got laid off after a few months (institution shut down)... You can shop around meanwhile.

 

[trailerpark]

My biggest fear in consolidating my massive Stanford and grad plus government loans are losing the option of forbearance or extending the loan if something bad happens like a health thing or job loss. Refinancing to 3.5 percent would probably massively shorten the time I'm allowed to pay off the loan but increase my payments a lot. How do you guys reconcile that?


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[MatCauthon]

I think we may lose our options for IBR and PSLF if we consolidate our loans, though not 100% sure since I never used IBR.

Many of my fellow classmates are going on IBR and planning on never paying their entire loan balances off. This is a strategy one needs to consider. Saving money for a downpayment is very important and spending money on student loans detracts from this.

While my loans are at 3.5%, I have also toiled in 2 jobs over the past 5 years to get my loans paid off. There has been some opportunity cost associated with this. At one point, I had the opportunity to go on PSLF. It may have been a mistake to pay off my loans so aggressively. Time will tell.

 

[trailerpark]

It's never a mistake to pay off student loans too early. The piece of mind is worth more than any numbers game someone on here does to justify paying the minimum or whatever else that extends repayment.


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[d2rx]

I consolidated my loans about 6 months ago. I applied to SOFI and DRB. SOFI offered me higher rate (4.99% fixed) to be paid in 5 years, while DRB had much lower rates to be paid off in 10 years. I chose a variable rate of 3.22% (vs. 4.7% fixed) which has steadily increased to 3.59%.

For those using the IBR or similar plans, what are your monthly payments? and how long before your loans are forgiven? How much would you have paid over that period of time? These are the questions I asked myself before I consolidated my loans.

 

[Student Loan Planner]

I consolidated my loans about 6 months ago. I applied to SOFI and DRB. SOFI offered me higher rate (4.99% fixed) to be paid in 5 years, while DRB had much lower rates to be paid off in 10 years. I chose a variable rate of 3.22% (vs. 4.7% fixed) which has steadily increased to 3.59%.

For those using the IBR or similar plans, what are your monthly payments? and how long before your loans are forgiven? How much would you have paid over that period of time? These are the questions I asked myself before I consolidated my loans.

In general if your debt / income is below 1.5 refinance, if above 2.0 then don't. If in between then think about it both ways and go with personal preference. This might be semantic but it's refinancing that's being discussed here. Consolidation is a different thing entirely and is only possible on the federal loan programs. You consolidate your federal debt when you move a bunch of loans into one loan with the federal government. You refinance when you move a federal loan from the public to the private sector for interest savings.