I consolidated!
Let me say that again: I CONSOLIDATED! I was actually approved for a private
student loan consolidation :) I cannot explain to you the joy and relief the words, “you were
approved” brought to my soul; I cried a happy tear or two at my desk then
texted my mom and a few close friends about the news. It took 6 years
to get this. Although I have a decent stretch of road to travel in front of me, I
am hoping that the ride on the latter half of this journey is a bit smoother.
The facts: I decided to go
with Charter One/Citizens Bank. The reason being: interest rates. The only
other real option in my mind was Wells Fargo; however, Charter One’s interest rates were
approximately one point lower on both the fixed and variable options. Also of
note, I have been denied consolidation from Wells Fargo on more than one
occasion, so I figured I would try Charter One first to take advantage of the
lower rates and if denied, try my luck over at Wells Fargo again. Thankfully,
Charter One gave me an approval.
The only way I
would accept a refinance would be a). approval with no co-signer b). a low interest
rate and c). no early re-payment penalty. Based on my debt-to-income ratio (which is finally no longer inverted) I
was approved to refinance without a co-signer. Based on my credit score, which
they reported was 809 (they source EQUIFAX), I was offered their lowest interest rate. The only thing left for me to decide was the term length as well
as a fixed or variable interest rate. This was a tough decision because as I
stated in the previous entry, I was torn as to whether or not to embark on this
refinance journey if I was only going to be reducing my interest rate by a
point or two. Before I tell you which option I picked, allow me to lay out the
options I was given to choose from:
Term, Type of
Interest Rate, Interest Rate, Monthly Payment, Total Amount to be Paid:
20 Years,
Fixed, 5.44%, $299, $71,919.13
15 Years,
Fixed, 5.19%, $349, $62,831.51
10 Years,
Fixed, 5.04%, $460, $55,314.88
5 Years, Fixed,
4.99%, $813, $48,835.84
20 Years,
Variable, 2.82%, $239, $57,438.50
15 Years,
Variable, 2.67%, $294, $53,004.60
10 Years,
Variable, 2.62%, $411, $49,375.23
5 Years,
Variable, 2.57%, $766, $46,019.30
I went with the
20 year/variable term for merely monthly payment/total amount to be paid
reasons. Although the cap is astronomical, there is a cap on the variable
interest, but it is so huge (like upwards of 25(ish)%) that should it ever get
that high, I am in some deep water. All of my previous Sallie Mae/Navient loans
have been variable interest rates, and they never changed. I know many financial experts state to not choose a variable interest rate when a fixed is offered to eliminate any and all risk.
However, in my case, I am pretty confident I will stay crazy committed to paying this baby off. I may
look back on this paragraph 2 years from now and hate myself for it, but for
right now, in this moment, I feel okay about my decision.
What this means
for me: To begin, I did
indeed get the remaining 6K paid off from the original 14K I talked about in my
last entry; this put me right where I imagined, financing approximately 43K through
Charter One. This does significantly reduce the amount of interest I will be
paying each month, but in no way is this a cop-out in regards to my repayment
responsibility. I will still get this debt gone as fast as I possibly can. I have sacrificed my money,
time and freedom for far too long and am more than fed up with this burden; I
believe my annoyance and sacrifices in combination with the fear of a rising
interest rate will continue to fuel my inner crazy to keep putting every extra
penny I come across towards this loan.
