Hi, I have over $100k in federal student loans with a blended interest rate of ~8.5%, and I’m trying to understand whether it makes sense to refinance with a private lender (eg. SoFi), which is offering a rate of ~4.5%.
From a purely numerical perspective, refi seems like a nobrainer. However, I understand that federal loans offer unique protections if shit hits the fan (eg. job loss).
For context, I earn ~$300k annually and don’t have any other liabilities. I also haven’t lived in the U.S. for long, so I’m less familiar with how federal student loan refinancing works in practice.
Any perspectives and experiences would be appreciated, thanks.
The only thing I have to add is what is the blended maturity of your current loans and what would be the maturity of the ~4.5% loan? If you are roughly on the same maturities (ie - both ~10 years), the math will be obvious.
Many thanks. The maturity will be similar and I plan to pay it off within the next 3 years. I agree that the math supports the refinancing idea in 100%, but I’m trying to understand if keeping the benefits of the federal loan is worth the extra price, given the loan amount.
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