You're Not A-Loan

To refinance or not to refinance, that is the question. 

Refinancing can be daunting for many. I know that personally, I did a lot of research before I chose to even start applying for refinancing options. Not all companies are created equal. Then when I started to apply…denied, denied, denied. I must have submitted applications regularly every few months for 3 years or so. TIP: Never apply for multiple options back to back, or too close to each other. These applications will pull your credit report and score, and each time it will be filed as an attempt. 

If you are currently being serviced under Navient or Sallie Mae, the answer is almost always, REFINANCE ASAP. Navient and Sallie Mae have high-interest rates and they have a lot of negative practices that lose you money. For example, when I would make extra payments to Navient, I would always have to call and ask that it would be applied to the principal. Even then, it was sometimes not allocated appropriately, and I would have to call back and call back. Rather than wanting your money to be applied to the principal, they will extend the payments to show that you do not owe for future months. This means that the majority of your money is being applied to interest. In turn, that means you are taking off very little of the actual loan amount. This process is killer, and unless you are aware or paying attention to how your payments are applied, you could be doing yourself no favors when in fact you think you are working hard to pay off extra. Another problem with Sallie Mae and Navient before refinancing, especially with your private loans, your interest rates are variable. This means that your interest rate can change without you being alerted or asked for permission. I had private loan interest rates jump from 7% to 11.25%. That is a HUGE difference! That is more of my hard earned money being paid to interest and not even touching my loan or principal amount. In fact, when I was with Navient for the year 2016, my interest paid out was over 10,000 dollars. YUP,  <gag>  $10,000 of my money paid to Navient on my private loans went to the interest. This is why paying down the amount I owed for the loan was so STINKING hard. 

In my personal opinion, I believe I was denied so many times for refinancing, prior to this year, for a few reasons. 1. I had a co-signer, and to Navient they were also responsible for the payments and they “made enough money to cover the loans.” 2. My debt to income ratio was really awful. 3. I did not have a long enough loan payment history. 4. I was lumping together my private and federal loans to refinance. 

So after about 5 years of paying on my loans to the devil’s company, having those payments be on time, and making overage payments, that showed on my credit and it helped the debt to income ratio even out slightly more. Another trick I believe helped me was separating my federal and private loans, and only seeking to refinance my private. 

Refinancing my private is more important to me anyways. Federal loans are regulated by the government and are so much more flexible. SEE HERE FOR FEDERAL VS PRIVATE LOANS 

Finally, in December 2016 I was eligible to refinance with Citizen’s Bank, which services loans through Nelnet First Mark Services. I have had an amazing experience with them so far, and I highly recommend them.  I was able to refinance 55k worth of private loans. I was able to pick the term length for how long I was going to pay, and my loans were consolidated and lowered about 5% overall on average. With Citizens, I have called them and I have had excellent and clear customer service. I do not have to call and beg for my extra loan payments to go toward the principal amount, it just does it automatically. 

Some other refinance companies that I recommend are below: 

Citizen' Bank 

SOFI 

Earnest

As for my federal loans, they are no longer being serviced by Navient either. Being a school teacher, I will eventually be considered to be eligible for some student loan forgiveness. The payments are tracked by MyFedLoan.org. So they are not my service provider. I do not currently have any concerns or issues with this service provider either. 

If you are wondering how much money you could save refinancing, or how changing the term of your loan or paying extra could help, CLICK HERE to use a student loan calculator.