Everyone knows that student loan debt is a hot topic in the media as of lately. It is becoming a huge problem for the young people in this country, and if you are like me, you’ve got a lot of it. I went the route that a lot of kids go. I went to an expensive private school, and never really paid attention to how much it was going to cost me down the road. It’s easy to sign up for $100,000 in debt ($67,000 of that at a 9% interest rate) when you don’t understand interest and don’t have to worry about making payments until four years in the future.
It has all turned out well so far for me, but I know that there are many people that are not in the same position as I am. I am lucky because I was able to sign with a company six months before I even graduated. My first day of work was two days after graduation, and now, three months later, I am doing well. Nonetheless, I am always looking for ways to save money, especially on those loans.
A few days ago, I saw that the U.S. Federal Reserve lowered their rates for the first time since the recession, roughly a decade ago. Since the Federal Reserve’s interest rates have a direct effect on the interest rates that banks charge, I recognized that it was a great time to refinance my loans.
As soon as I had the time, I immediately started shopping around for refinance options. As previously mentioned, the interest rates on my private student loans were roughly 9%, which is flat out terrible (a lesson on why you should build your credit score early). Given that this rate wasn’t particularly hard to beat, I spent about 20 minutes getting quotes from the banks with the best reviews on Google. I decided to go with the bank that gave me the best rate, which in this case, happened to be Earnest (If you refinance through that link, we both get $200!). They were able to refinance my loans for the same term at 4.79%, a huge savings! Below is a comparison using the student loan payment calculator at Bankrate.
Overall, I spent about 30 minutes, and was able to save an incredible amount of money. Be sure to take advantage of the lowered interest rates, and refinance! Also, in the coming months, I will have a review of Earnest based on my experience with them, so keep an eye out for that!
Disclosure: Bear in mind that some of the links in this post are affiliate/referral links and if you go through them to make a purchase I will earn a commission. Keep in mind that I link these companies and their products because of their quality and not because of the commission I receive from your purchases. The decision is yours, and whether or not you decide to buy something is completely up to you.