Student Loans

Does It Make Sense to Consolidate Salle Mae or Navient Student Loans With SoFi?

Written by Steve Rhode

Question:

Dear Steve,

I am a retired financial professional/CPA who has been asked to advise a friend’s son on how to best manage his debt.

He is 26 years old and earns $200K including a year-end projected bonus of approximately $75K. His most recent credit score was 650. He has 3 Sallie Mae Student Loans totaling $112K at interest rates b/t 9.75 and 10.5%.

He also has 5 Navient Student Loans totaling $37K at a weighted average rate of 4.83%. He has exhausted his forbearances at this point and while he is current on all minimums, he was late on payments in the past 5-6 times. He also has $19K in credit card debt with $5K at 8% and the remaining $14K at a weighted average rate of 23.5%. Aside from his debt, he has moved past some earlier financial challenges.

My main question is whether he would qualify for refinancing the three high-interest rate Sallie Mae loans with companies like SoFi, etc.? If yes, what type of interest rate might he be able to receive. With respect to his credit card debt, is there a best way to request lower interest rates via hardship programs?

Thank you.

Ray

Answer:

Dear Ray,

SoFi student loan refinance rates can be found online here.

You should make sure none of these loans are federal student loans before consolidating them in a private refinanced loan. He could lose special repayment options if he does that. Sallie Mae and Navient loans can be either private or federal. You can confirm if any of these are federal student loans by checking at the National Student Loan Data System site.

Reducing interest rates on credit cards can be accomplished using a credit counseling program. Keep in mind the cards will be closed.

But you can review the major debt relief solutions using my online calculator here.

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About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

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