What follows is my story leading up to refinancing my student debt with So-Fi. If you want to skip the background info and get straight to the review, please see the “Refinancing Through SoFi” section.
I managed to make it through 4.5 years of college at a private university with only $5,000.00 in debt. Between a generous scholarship, generous parents, and some summer jobs I banged my way through school and emerged with a dual major and a relatively decent balance sheet. I didn’t realize how lucky I was.
It was December of 2009 and I was clearing out my college apartment. I packed all of my worldly belongings into the back of a rental car and began the 16 hour drive to my parent’s house. On the road I reflected on my experience, and how I had little in the way of immediate career prospects or a real plan for the future. I had a finance degree and the thought of getting a corporate job was frankly pretty scary at the time. It was then that I made the decision to double down on my education and go to law school – presumably to graduate 3 years later into a vastly improved economy and walk into a cushy 6 figure job prosecuting patents or handling mergers and acquisitions of the 80th floor of some prestigious law firm. I commenced sharpening my pencils and seeking temporary employment so that I could take the LSAT, apply to law school, and with any luck join the starting class in August of 2009.
Fast forward to June of 2012. I graduated from a state law school with only $75,000 in student loan debt. From what I can tell I was again quite lucky. Although I funded my graduate school almost entirely though student loan debt (and again some summer jobs), many of my legal contemporaries waltzed away with much bigger student loan burdens. It is not uncommon to hear of law school graduate shouldering $150k+ in loan debt.
Still, these $75,000 in loans were no pittance, especially after logging in to the online loan servicing software and seeing this debt happily accrue interest at 6.8%. Holy Shit. At the time I still had no employment prospects to speak of, and the thought of paying down this obligation had me thinking about enlisting in the army, mowing lawns, or donating my bodily fluids to science – anything to get out from beneath the wheel. The economy was still on the mend and employers were not lining up to hire on brand new lawyers (especially brand new lawyers like me who graduated with a 3.1)
But as luck would have it I was in a new town. Though brute force, ignorance, and a lot of help from a mentor I managed to open my own law office. I started rendering legal services to anyone who would take a chance on a young lawyer with no experience, no money, and no real idea what the hell he was doing. It sounded daunting, even to me, but I was hungry and my lease was about to expire. The choice was to make this work or move back in with my parents across the state, and start prospecting for work all over again in yet another town. All at the tender age of 27. The perfect storm was brewing, and I was going to either capture lightning in a bottle or go down with the ship.
I hustled my ass off. I spent most of my time outside of the office, meeting with potential referral sources and marketing for clients. Pounding the pavement and pressing the flesh were my two biggest prerogatives. My overhead was low and my rates were competitive. I stumbled in to several under-served niches, and distinguished my practice. Within a few months I was break even. Quickly I became profitable. People asked how I was doing, and I would say “I’m still here.” That in itself was an accomplishment.
One of my first orders of business was to get my financial house in order. At this stage in my life, my foundation was built on debt.
At first the student loans scared me, but my fear soon turned to anger. The minimum payment was $700. I began chucking $1000.00 payments at my loan. Paying with my middle finger. The principal hardly budged at first, but I consistently poured money into the account. The needle began to move, but the 6.8% rate dismayed me. With Federal interest rates at an all time low, and the economy resting upon the backs of a new generation, I didn’t understand how the hell I could be the borrower on a 6.8% Federal loan. Frankly I still don’t. What is the public policy of making loads of interest on students? Probably the same public policy that is driving up the cost of education in the first place. But that is a subject of another article…
Refinancing Through SoFi
I looked into refinancing. I was about a year into my practice at the time and had heard of SoFi. I fired off a loan application and was promptly rejected. I didn’t take it personally. Without a single tax return under my belt and no one paying my salary I wouldn’t have refinanced me either. So I doubled down on my payments. I started paying the debt with my middle finger. I would make the minimum payment and then slide $1,000 on top of it. Then $1,500. Then $2,000. Whatever I could afford. I sold stuff. I lived off ramen noodles. I worked weekends. I further developed my side business. I would be damned if this interest rate got the better of me.
I decided to re-apply to SoFi in May of 2015. I my debt was down to about $36,000.00 at the time. I had a couple tax returns under my belt and had an amazing first quarter of business. I was feeling frisky. The loan application process was relatively straight forward. I filled out the online form and supplied tax returns, a payoff statement from Sallie Mae and whatever else they asked for (because I was self-employed they wanted to look at my books – which I promptly had my accountant prepare). When I had questions, or a problem with their loan application software, I was able to speak with a live person. Even over the weekend. The process wasn’t perfect (I had trouble uploading documents through their online application) but they seemed to want my business and get back to me in a timely manner, so I proceeded forward.
Amazingly, this time I was met with an approval letter. Now the choice became whether I refinanced into a fixed rate loan (I believe the rate was around 5.5%) or a 3.4% variable over 5 years. Interest rates are supposed to be on the rise, but I had made the decision to continue paying down the loans early, so I doubled down again and went for the ultra-low (but perhaps riskier) 3.4% variable option with auto pay. I figure even if interest rates rise sharply, it will be at the tail end of the loan when most of my principal is paid down. I should still end up on top, even if the interest rate ends up back at 6.8% or something stupid. I don’t necessarily advocate for this approach. There was no loan origination fee which made the decision even easier. I agreed to the variable loan and signed all of the necessary closing documentation electronically.
The loan funding process was relatively smooth. SoFi paid off my old debt and I opened an account with their new servicer. My payment is currently around $600 a month, with a good deal more going to principal thanks to the reduced rate. I got on their auto-pay program to save a little interest and I continue to pay this debt very aggressively despite the much lower rate. By my calculations, the refinance should save me $1,500 over the life of the loan assuming I continue to pay down aggressively. That number would be substantially higher if I just made minimum payments.
My advice to anyone seeking to refinance their student loans is to consider So-Fi. I had a good experience working with them. Had I been able to originally refinance my $75k from 6.8% to 3.4% from the beginning it would have saved thousands of dollars (tens of thousands if I just made the minimum payment). So-Fi is working for me and I give the company my personal endorsement.
If you sign up to refinance a student loan through SoFi using this link, you will get a $100.00 discount on your loan.
If you sign up for a personal loan through SoFi using this link, you will get a $100.00 discount on your loan.