SoFi Blog

3 Factors That Affect Student Loan Interest Rates & When to Refinance

Posted by & filed under Featured Posts, Personal Finance, Student Loans.

student-loan-interest-ratesLately it seems there’s much ado about student loan interest rates in the news – whether it’s the latest push for refinancing legislation, or the recent headlines announcing changes in federal student loan interest rates, or speculation about when to refinance given the likelihood that rates will continue to edge higher.

From the micro to macro level, there are several elements at play that can affect the amount of interest you’ll have to pay on your student loan debt, and it’s understandably tough to stay on top of them all.  How exactly do all these variables affect your loans’ rates, and – more importantly – why should you care?  Let’s review the top three factors:

5 Ways to Avoid Predatory Student Loan Scams

Posted by & filed under Student Loans.

student loan scamIf you’ve got student loans, chances are you’ve seen an email or Facebook ad that says something like this: “Call now to qualify for President Obama’s Student Loan Forgiveness program.”

Sounds official, but that voice in the back of your head saying you should probably be wary is right. Many scam artists prey on stressed-out borrowers who are struggling to pay student loans – put your trust in the wrong place, and you’ll end up worse off than you started.

Here are some tips on how to get the help you need, without being misled or defrauded.


Does Student Loan Debt Hinder Millennial Homeownership?

Posted by & filed under Mortgage, Student Loans.

student loan debtStudent loans: Can’t live with ’em, can’t get a college degree without ‘em. At least, that’s the case for most of us.

Despite all the negativity surrounding the subject of student loan debt, the general consensus is that it’s better to have a degree than not have one – even if you have to contend with loans in order to afford it. After all, the typical college grad enjoys higher earning potential and lower unemployment than those without a degree.

But clearly there are negative aspects to shouldering student loan debt. One big example? The potential impact on your ability to buy a home – a topic that’s inspired its fair share of headlines this past year. Since saving for a down payment is often the biggest hurdle to homeownership, young people with large student loan payments are obviously at a disadvantage.

Which begs the question: When it comes to buying a home, is it better to have a college degree and its associated student loans – or are you better off with no degree and no loans? That’s one of the questions that Trulia Housing Economist Ralph McLaughlin set out to answer with his recent analysis on how student loans impact saving for a down payment.

I recently sat down with Ralph to find out more about what he learned, what surprised him about the research, and what millennials should take away from the findings.


Student Loan Interest Rate vs. APR

Posted by & filed under Student Loans.

Interest Rate vs APRPop quiz: What’s the difference between interest rate and APR? As a student loan borrower, you’ve seen these terms on countless forms and websites, but you probably haven’t had time to really meditate on what they mean. After all, you’re busy with school, work, life and a lot of other things that are a whole lot more interesting than memorizing student loan terminology.

What you probably do know is that student loan interest rate affects how much money you’ll spend on paying back your loan, whether you’re refinancing student loans or taking out a new loan. And if saving money is important to you (or, at the very least, not spending more than you have to), it helps to understand some of the words that ultimately impact your loan payments and your bottom line.

Want to be a smarter borrower? Take five minutes to read these five FAQs about interest rate vs. APR:


How to Choose Between Variable And Fixed Rate Student Loans

Posted by & filed under Featured Posts, Student Loans.

student loan debt college graduatesFor college graduates both new and old, the fun of “summer vacation” is often dampened by thoughts of the student loan debt they’re paying off.  But if college grads take this time to assess whether it’s possible to refinance and consolidate student loans, it could end up easing their debt burden as well as their minds.

There are several factors that can help determine the need for a student loan switch-up.  For example, student loan interest rates may have gone down since you first took out your loans, or your financial situation may have improved, making you eligible for a lower rate.  If you find yourself in either of these categories, you may qualify to refinance student loans – and you may be presented with the option to refinance into a variable rate student loan.

So what’s the difference between variable (sometimes called “floating”) and fixed rate student loans, and how do you know which one is right for you?  Here’s the quick breakdown:


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