You’ve been in a committed relationship with your student loan interest rate since you graduated, but lately you’ve started to notice that something has changed. The magic you felt when you first took out your loans is gone, leaving a growing resentment toward that nagging monthly payment in its wake.
With Valentine’s Day fast approaching, now’s a good time to re-evaluate your feelings toward your student loan rate. After all, there’s no point in buying it a fancy dinner if you’re not in it for the long haul.
So how do you know if you’re in a toxic rate relationship? Here are three signs it’s time to kick that deadbeat debt to the curb.
1. You spend all your money on your interest rate.
With student loan payments monopolizing every paycheck, it’s a wonder you can even afford the rare night out with friends - and they’re not afraid to complain about it.
2. You’ve changed . . . but your interest rate hasn’t.
You’ve worked hard to improve your situation since graduating - landing a great job, increasing your income and taking good care of your credit. Your interest rate, on the other hand, is totally stuck in the past.
3. You can’t help but look at more attractive interest rates and think, “If only . . .”
With interest rates at historic lows, it’s hard not to compare what you’ve got with the other rates in the sea - particularly if you’ve got high interest rate private, federal unsubsidized or federal PLUS loans on your plate.
If you’ve ever looked at your student loan interest rate and thought, “I can do better,” you probably can - by refinancing your student loans at a lower rate. Not only can you save a bundle on interest, but refinancing can also lower your monthly payments or shorten your payment term, so you’re done with your loans sooner.
And if you refinance with SoFi, a leading marketplace lender, you get more than just cost savings. SoFi offers its members perks like career support, unemployment protection and no fees. With the average SoFi borrower saving $11,783*, it’s like finding your interest rate soul mate - no Tinder required.
*Savings calculation is based on SoFi borrowers who refinanced between 5/21/14 and 7/2/14. Prior to refinancing, these borrowers had on average a $71,000 loan balance, a rate of 7.07% and a lifetime payment of $99,239, assuming the standard Direct Loan term. After refinancing, these borrowers have an average lifetime payment of $87,456 based on a weighted average of new rates received across both types (fixed and variable) and all terms offered by SoFi with AutoPay. Savings calculations assumes borrowers make all payments in a timely manner and do not prepay.
Under SoFi's Unemployment Protection program, interest continues to accrue during periods of non-payment, and other terms and conditions may apply. Federal loan features and benefits don't transfer to private lenders through the refinance process, so borrowers should check to see if they would benefit from federal loan forgiveness and income-driven repayment programs before refinancing federal loans.
SoFi loans are made by SoFi Lending Corp., NMLS #1121636
California Finance Lender #6054612.
