Today’s topic, should you refinance your student loans? That’s right, another student loan topic. If you joined us last week, we had the awesome privilege of hosting Andrew Pollson from studentlooneadvice.com, a white coat investor company where we got into it.
We got into a very long conversation, as we do with all of our interview topics on student loans. Uh today we take it a little bit more towards those of you who may be looking to refinance towards the private side. Right? So uh there’s pros and cons here. We’re going to list three pros. We’re going to list three cons and kind of give you some food for thought.
Uh but with the one big beautiful bill passing uh by the time this goes live, let’s just call it early July, right? Um so we again we had a great episode last week with Andrew. Now we’re going to pivot a little bit this week onto that student loan side on the private side. So, pros, cons, food for thought coming up next.
Quick Note Before We Start
All right, before we get into it, quick favor to ask. As you know, I always plug it in here. If you’ve not subscribed, make sure to follow the blog for updates like this every week. Stay connected, spread the message, and keep checking back whenever we publish new content like this.
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Why Student Loans Are Everywhere Right Now
Why are student loans everywhere on YouTube and social media right now?
Well, it’s because again, the one big beautiful bill passed early July. Uh we also have very uh breaking news when I’m as the time I’m recording this that interest will start to acrue again on the save program as of August 1st.
So for most of you, you have probably not done anything with your student loans for years, literally years, and now all of a sudden turning on the fire hose. Here we go. Get ready.
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Important Warning About Refinancing
So again, last week we had a great discussion with Andrew. that one. You know, we we really apply focus a little bit more on uh the federal loans in terms of public service loan forgiveness and and really dug into um the effects of that and and really on the physician community. Today, I want to take it a little bit different uh and and get into those of you who should be maybe thinking about private loans.
Um now, I will likely say this numerous times during today’s article.
This is something that cannot be undone.
So, if you have a current federal loan now and you were thinking about refinancing it to a private loan, it cannot be undone. There’s no oopsies. Didn’t mean to do that. Once it’s done, it’s done. And that is extremely important for a lot of the things I’m about to walk through.
Now, there are plenty of benefits to doing this as well, but I just need to emphasize with everything I can emphasize that once you do this, there is no going back. So, you need to make sure that this is not just, you know, a quick decision because of something you saw online or on social media, whatever the case would be. You need to make sure that research has been done here.
Pros of Refinancing
So, even if you need a separate student loan only um review, check out again Andrew from last week at studentlooneadvice.com. Uh again, a white coat investor company there.
But let’s go through the pros. What are the possible pros to refinancing a federal loan to a private loan?
And and let me put one little extra caveat in there. If you already have a private loan and you’re looking for a lower rate, that’s not who I just yelled at, right? If you already have a private loan, you should be shopping. You should always be looking for the lowest rate. Moving a private loan to another private loan is not our concern.
And if you have a private loan from when you were in school, you likely have an obnoxious interest rate. So now is the time to go look for some of those lower refinance rates.
Um, you know, through our platform and content, we have a good relationship with Laura Road. They have really good rates out there.
Lower Rates
One thing that we see most often, and really the main reason why we’re looking at this is lower rates.
So, if your federal rate is six or seven, but you go get a rate check from Lower Road or any of the other SOFIS or u any of the other providers out there, you’re ideally you’re going to get a a decently lower rate, possibly much lower, right?
Simplification
If you had 20 federal loans and you get them all consolidated into one private loan, much easier to manage, right? You get everything in one spot.
Faster Payoff
Uh the third one we listed on here was was faster payoff. Uh now I will in full disclosure, right? You you that might not happen.
Cons of Refinancing
Now, with that, there’s still cons coming, right? Going through the good stuff now, there’s still bad stuff to come.
You have a lot of safety nets. So, um, these are things that you would lose, right?
Loss of Safety Nets
You have a lot of safety nets with federal loans. You know, there there’s essentially you would lose any hardship help. So, if you lose your job, forbearance, things of that nature, you death, disability.
Higher Payments
With federal loans, you can control your payment structure a little bit more. With private loans, you’re likely going to have a higher payment.
Loss of Federal Protections
And then most importantly, the one I keep emphasizing time and time again here is you lose your federal protections.
Who Should NOT Refinance
So, in short, who should not be refinancing their loans, federal to private?
- If you’re going for public service loan forgiveness
- If you are going for traditional forgiveness
- If you’re in training
- If your income is unstable
Who Should Consider Refinancing
Who’s our maybe group?
Maybe if you are not going for public service loan forgiveness or any other traditional forgiveness for that matter.
Final Thoughts
So, there you have it. Should you refinance your student loans with a focus really on the private side of it?
As always, thanks for taking the time to read.
Conclusion
That’s it. Thanks for reading. We’ll catch you in the next post.
