Effects of consolidating student loans
Student loan consolidation is the process of unifying several loans with different rates and terms into a single loan with a single payment.
The blended interest rate is determined by calculating the weighted average interest rate of the original loans (meaning higher balance loans have greater impact). I had a great experience recently in refinancing my student loans!
When you refinance multiple loans, the lender will evaluate your current financial profile to provide a rate that reflects your financial progress since you originally took out the loans. Our payment is a bit higher but at least now we know our rate is the best we can get, it will not fluctuate and we are confident that we will have it paid off in 5 years. Online interface could be improved (especially as compared to So Fi's). I started the process and found that as I went each step of the way, instructions were clear and easy to follow. Everything fell into place and all was done relatively quickly.
Whereas consolidation just streamlines bills, refinancing also shrinks them. They ask for a lot of information from you but it's worth putting the time in to get the consolidation completed and it assures you that your information is being protected. I like being able to see the amount of interest accrual since last payment and principal balance easily on the first page and that is not possible now on the current web page. Why not strive to offer your customers the best deals instead of making them jump through hoops to re-apply for a much better rate?
I started the process to refinance with another company when the folks at Earnest reached out to see if they could modify my loan to similar rates. My previous student loan company (Navient) clearly did not care about me or my repayment goals. I was able to get updates via chat whenever I needed one, and overall the experience is great. They do this by examining an applicant's holistic financial picture, rather than focusing on factor (like credit score).
Long story, short, they were able and did so very quickly allowing me to keep the payment flexibility I love with Earnest while getting a better fixed rate. Earnest lowered my fixed interest rate, shortened my payoff date and provided me 0 for transferring my student loans. With that being said, I felt that my rate wasn't as low as possible.
I was paying 10.5% variable interest on my student loans - by variable I mean only getting variably higher every 6 months. I shopped around a little bit and Earnest gave me the best options to choose from.
Through them I've greatly reduced my interest rates and monthly payments, without increasing my repayment terms significantly.
I previously had my loans at So Fi, but I heard of Earnest through a friend and I decided to look into them.
I was able to refinance my student loans for less than half of the interest I was paying before.
In doing so, I was able to hack off 3 years of the life of my loan and I will save over ,000 in interest. Definitely recommend Earnest to anyone that is looking to better their financial future.