PSA: Consider refinancing loans Forum

[Citizen Genet]

This a PSA for everyone in BigLaw. If you have federal loans that have 6%+ interest rates and you have the income to increase your monthly payment, you should seriously consider refinancing. Rates on variable and fixed interest loans are insanely low. I’m on a variable that is currently just north of 2% interest rate, down from my just above 7% rate I hade with myfedloans. That difference means I save more than $5k per year per $100k of loans on interest payments alone; it is actually bigger savings since I reduce my principal faster.

The biggest thing you give up by going private is the option to go into an income based repayment plan. Lots of lenders have forbearance and discharge-on-death policies like federal loans offer. You will also have to switch to a 5 year repayment plan to get the really low rate. That’s why I say this is mainly for BigLaw attorneys. You need to make sure you have the cash flow to do the increased monthly payment. I decided I wanted to save roughly 60k on interest payments and am just putting all of my surplus income at paying loans off in about 16 months.

Because I don’t want this post to seem like an ad, I won’t name any companies in particular to refinance. I will let others do that. I just figured someone should mention this because I know many people try to just shove loans to the back of their mind. But with how low interest rates are, you should force yourself to think through a budget and consider it.