Post-college life

Real refinance customers share advice for paying down student loans

We interviewed CommonBond members about their student loan journeys. Here’s a round-up of some of the advice they gave.

Making extra payments = progress

“I put every tax refund, money from side gigs, and two full paychecks per year toward my loans (I plan my budget on 24 paychecks per year instead of 26). My boyfriend thinks I take it a little too far – if his grandma gives me twenty bucks for Christmas, I put it toward my loans! But I don’t want to be paying loans when I’m his grandma’s age.”  – Lia, 30

“It can be tough when there’s a big amount ahead of you, but you have to start somewhere. Anytime I get extra money or a bonus, I throw it at it my loans.” – James, 31

“My goal is to pay down my loans as quickly as possible, so I consolidated them into a 5-year repayment period at 4.2%. I put my signing and merit bonuses towards the loan – I appreciate that there’s no penalty for making extra payments" – Jenny, 28

How much of my discretionary income should I put toward my student loans?

Don’t forget to work on your credit score

“I cut down on my spending and used my tax refund and end-of-year bonus to pay off $4,000 in credit card debt, and after that my score went up by almost 100 points. After that I was able to refinance my private loans from a 12% rate to 4.29% with CommonBond... I’m on my way to being debt free in five years!” – Ayrton, 24  

“I was scared of getting a credit card, but I didn’t realize not having one could impact my ability to establish credit. Eventually I had to get a credit card for work travel, and I realized my score was going up, along with my income. In 2015 I refinanced my four private loans into one loan. I knew there might be a better rate out there, but I just wanted to do it and keep moving forward. I’ve refinanced every year since then. My highest ever interest rate was 9.75%, and my current rate is 3.1%.” - Lia, 30

“I downloaded the Credit Karma app and looked at all the things affecting my credit. I started by getting rid of small debts, like high interest credit cards. Every time I paid one of those off there was a little sense of accomplishment. It also helped me see the impact of things like one late payment from five years back. I realized I needed to get more organized. I got a notebook calendar to write down all my due dates and examined my monthly budget to see what I didn’t need... With a respectable score, I figured it was worth a shot to try and refinance.” – James, 31

6 ways to boost your credit score

Taking out loans? Do your research.

“My advice is to think really strategically about what your priorities are and whether the degree or graduate degree you’re pursuing is going to help put you in strong financial position to pay back your loans. When you’re taking out loans, considering the caliber of the school and the opportunities that come after is really important.”  – Jenny, 28

“Explore as many options as possible. I was told Sallie Mae was the way to go. Then I realized my peers in college had gone through different routes with different payment options. I feel like I didn‘t have enough education about what was available to me. I went for the most common option, and that bit me in the butt.” –  Alexandrea, 24

“Don’t underestimate how much you’ll have to pay after you graduate. Educate yourself on how expensive school is, how interest works, the types of loans you’re getting, and whether they’re subsidized or unsubsidized. If you’re able, start making payments as early as possible, even before that six-month after grace period.” – Ayrton, 24

Want to make more progress on your loans? The CommonBond guide to paying off your student loans is a great place to start.

Refinancing can be a game-changer

“Six months into my “big boy job,” the expense was crippling. Refinancing was amazing. I got a 5-year fixed loan and I’m saving 2.5% in interest and lowered my minimum monthly payment by $500 per month.” – Colton, 26  

“I’ve refinanced my sixteen original loans... by December 2020, I’ll have finished paying off my loans eleven years early and saved about $125,000 by refinancing. I’ve become an expert in how to pay off loans making less than $65,000 a year – it takes a lot of discipline and constant re-evaluation.” – Lia, 30  

“There’s a picture that gets painted of federal loans about letting you defer or get forgiveness, but federal loans are a merry-go-round. You’re going to pay a higher rate because you have a false sense of security about them. I did the math, and I would have ended up paying more if I had stuck with them. My recommendation is to refinance immediately after school if you can.” – Melissa, 38  

Is it worth it to refinance your federal loans?

“I figured if I could get my interest rate down to even eight or nine percent, it would be better than nothing. I applied with SoFi first, but because I only had a 1-year contract as a teacher I had to jump through a lot of hoops, and I ended up getting denied in the end. Then I applied with CommonBond. They were extremely easy to work with and I got approved for a 6% interest rate.” – Alexandrea, 24

“I was beyond thrilled when I got approved. I couldn't believe my new payment. I went from $1150/month payments (with three different companies) to one payment of $835/month. It was a huge relief for me. After years of hard work, and our new lower payment, my wife and I were able to purchase our first home! This was something I thought might not be possible with the financial situation I was in. I'm here to say that while student loans can be a debilitating, there is still hope. If you continue to focus on improving your personal finances and get a little relief from CommonBond, you can live the life you want.” – James, 31

Explore your refinancing options with CommonBond

Read the full interviews with Alexandrea, Ayrton, James, Jenny, and Lia.

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