Posted on r/personalfinance but thought someone could steer me in the right direction.
Have a decent amount of student loans that I hope to eliminate in the next couple of years.
I (25M) work Full time in a large city where cost of living is high. My plan is to refinance higher interest private loans and pay a large amount towards refinanced Principal. It seems that consolidating my lower interest loans would not be as effective as they are reasonable rates. I want to decrease my monthly payments while giving myself an ability to pay these off faster.
My question is whether I should pay a larger sum of cash $20K-$30K toward existing loans and then refinance or refinance and then do the same. Will a creditor give me a better rate if balance is lower?
Salary – $70,000
Checking – $53,000
Savings or retirement – $0
Scheduled 1099 Income for remainder of 2019 – $26,500 – This will increase as I have other pending assignments that should pay another $10-15K and have closed. I work in the real estate sector that allows me to make commissions on top of my salary.
All expenses – $3,900 per month including loan payments.
Discover – Four loans totaling $45,700 @ average rates of about 7.0%
Nelnet – $27,000 @ lower rates of 3-4%. In deferment until August 2019. Sallie Mae – $12,700 @ average rates of 4.7%
Attended private college and graduated in 2016 with a B.A in business.
All loans other than Nelnet have been in repayment for over 12 months. FYI almost all of these loans are fixed rates.
I should be better at doing this myself but in the world of refinancing loans, its tough to figure out the best method. I know that I should not just have this cash sitting around and that it can benefit my overall monthly expenses. Right now payments are about $800 PM. I pay more than minimum on Discover but more than half goes to interest.
Anything would help. Thanks very much.
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