topic Citizens Bank Refinance Education Loans in Student Loans

Citizens Bank Refinance Education Loans

Anonymous — Sun, 28 Feb 2016 16:53:47 GMT

Anybody have experience going through this process with them? Just applied online and wondering how strict they are with approvals ... my student loans are the death of me!! No matter how much I pay in each year my balance keeps rising, just want to cry! My scores are low 700s and Sofi keeps declining me .. I owe 109k! in debt more than my balance on my homestead! The thing that bothers me most is the balance never goes down ..when I started repayment my balance was 101k that was 4yrs ago ...always made timely payments and now balance is tipping to 110k ... why wont anyone rescue us from this type of monopoly, I cant believe this is even allowed to happen ... I just want to refinance with any lender that will make my balance begin to go down instead of up...I pay the minimum cause even that is like a car note (350) and it keeps going up ... they want my monthly payments more than my mortgage but I cant afford to take on that type of obligation. ..I'm really praying this Citizens Bank can get me out of this mess ... any suggestions are appreciated

Re: Citizens Bank Refinance Education Loans

SCF — Mon, 29 Feb 2016 00:31:01 GMT

It sounds like you have been making payments that are less than the interest your loan accrues each month - which is why your balance has increased. As you noted, your balance is currently about the same as a mortage. Given that most private student loans have a higher interest rate than mortgages, it's not surprising that the payment amount would be higher than your house payment.

What is your current interest rate? Who is your current lender?

I know that Sallie Mae has a program for distressed borrowers which can lower your interest rate to ~1%, or at least that others have posted about being put on a such a program. Have you asked your lender if they have any similar options?

Ultimately though, you probably need to substantially increase your income so that you can make much larger payments on this debt.

Re: Citizens Bank Refinance Education Loans

Anonymous — Mon, 29 Feb 2016 01:26:29 GMT

My current rate is 6.25% and that's with my auto discount ...never changed lenders, it's through the department of Education which then became Navient ... No one liks handing out 100k+ unsecured loans ... I don't blame them but I think this traps so much of our youth and it's totally unfair ...yes I suppose if I paid the 1200 monthly it might begin to go down sum but I can't afford that right now ... No win situation

Re: Citizens Bank Refinance Education Loans

SCF — Mon, 29 Feb 2016 04:16:26 GMT

It's actually really good that these are federal loans, because you have options for income-driven payment plans (like IBR, PAYE or REPAYE) to keep payments affordable. Each of those plans comes with forgiveness after a specific amount of time.

You should read through the information on the different plans on https://studentaid.ed.gov/sa/repay-loans/understand/plans, as well as the information they provide about Public Service Loan Forgiveness. Working in Public Service might be a financially solid choice for you, especially since it seems like your current wages aren't allowing a substantial payment.

You aren't doing yourself any favors by lamenting how "unfair" it is that you are "trapped." You chose to take on these loans, and they are your responsibility. Since they are federal loans, you've got several different options, you just need to educate yourself and choose the one that is best for your situation.

Re: Citizens Bank Refinance Education Loans

Simply827 — Mon, 29 Feb 2016 20:23:24 GMT

I refinanced my private Sallie Mae loans with Citizens Bank, but I don't think this is a good idea for you. Since these are Federal loans you have, and you have such a large balance, I would leave them where they are. There's a good chance Citizens will want much more than you're currently paying, and you stated you can't afford it. You'd also lose the benefits that come with Federal Loans. Get yourself on an income driven payment plan if you aren't already. Get a part time job so you can pay more toward your balance.

Re: Citizens Bank Refinance Education Loans

Anonymous — Tue, 01 Mar 2016 02:40:28 GMT

Not asking for a pity party just wondered how everyone else got from under this situation. .. unfortunately I have a 16 year career in financial services so its not anything related to those forgiveness plans available to me ... yes, Citizens will want more and I will stretch thin and make extra payments if I knew it was actually making a difference. .. thx for responses

Re: Citizens Bank Refinance Education Loans

SCF — Tue, 01 Mar 2016 03:40:42 GMT

@Anonymous wrote:
Not asking for a pity party just wondered how everyone else got from under this situation. .. unfortunately I have a 16 year career in financial services so its not anything related to those forgiveness plans available to me ... yes, Citizens will want more and I will stretch thin and make extra payments if I knew it was actually making a difference. .. thx for responses

The forgiveness at the end of IBR/PAYE (25 or 20 years of payments) is not dependent on your career like Public Service Loan Forgiveness. All you have to do is be enrolled on an income-driven payment plan and make the required number of payments. If increasing your income isn't an option, then this is a way out. The amount forgiven is taxable at the end, but your total liability may not be much depending on how solvent you are the year it is forgiven.

Re: Citizens Bank Refinance Education Loans

Anonymous — Wed, 02 Mar 2016 02:29:31 GMT

Good to know its not career specific thank u ... 20 yrs seems so far away. ..if Citizens approves me ill do my best to squeeze a 10 yr - 15 yr at most repayment plan, rates are in the 2s with those options

Re: Citizens Bank Refinance Education Loans

Anonymous — Sat, 17 Dec 2016 08:32:36 GMT

It's probably too late to be lecturing you but I'll say it anyways because I want other people who see this post to do the calculations before they take on such a large loan. Your mistake will now become someone else's value information. Anyways, you should always include the payment with interest. On top of that, always always make sure you can afford such a huge loan. I know college was probably your top priority but that should never justify an amount of debt you could never afford. I personally went to community college and did my last two years at a university. I will be out of school with 50k. My job offering should be around 30k-50k and my parents have saved enough to pay off half of my loan as soon as I graduate. With that being said, make sure you research your major to see if you can afford such a loan. I don't know if you know this but student loans will never default. You can file for bankruptcy and it will continue to follow you and haunt you for the rest of your life and I promise you, these people will garnish your wage for as long as you can stand on your two feet and work. That being said, I've seen the offer from Citizen Bank for the consolidation of loans. It is a variable rate so they can fluctuate almost wildly depending on the market. I would try to stick to your original loans and pay more. Try to save money in other ways so you can pay more than minimum. Also, I believe that if you auto pay, you get a discount on the interest rate. If you can, I recommend paying twice a month. The faster you pay, the faster this thing will go away. I hope this helps you and everything else in your same situation.

Re: Citizens Bank Refinance Education Loans

Anonymous — Thu, 29 Dec 2016 04:47:06 GMT

I refinanced a private SL I had to Citizens Bank - the process was smooth and painless, and I got a lower interest rate with them, than I previously had.

That said - I would highly recommend not refinancing government loans, into a private loan. There are so many options with federal loans available to help you that are not available with private loans.

Look at the income driven repayment plans - PAYE/REPAYE forgive student loan debt at the end of 20/25 years. Does not matter what your profession is. There are calculators online that can tell you what your payment would be under each plan. To give you an idea - my AGI on federal taxes is about $35k - my monthly payment is $27/mo.

The thing to keep in mind though, the loan forgiveness under these programs, is taxable as ordinary income in the year it is forgiven. The key so you don't take a huge hit with $150k loan being forgiven in a single year, is to consolidate 2-3 loans together each year, to stagger them out, so that their forgiveness dates are spread out across multiple years, instead of all in the same year. That way you only have $10k-$15k being forgiven at a single time, which wont kill you on the taxes.

Re: Citizens Bank Refinance Education Loans

Anonymous — Tue, 03 Jan 2017 01:56:15 GMT

Well based on my income when it was like 75k with govt loans they wanted payments like 800 - 900 from me a month then it just kept goin up - im payin 1300 now with citizens but just got done with year one repayment and principal reduced 6k in last 12 mos ... doesn't sound like much but this is the first time balance went down since i graduated in 2012 ... i have 9 yrs left with citizens and done .. not 20 like the forgiveness plan ... my credit was shaky like 690ish when I did citizens loan, i will refinance again with them this year since im now around 720ish scores and get my rate/payment reduced. ...

Re: Citizens Bank Refinance Education Loans

Anonymous — Tue, 03 Jan 2017 21:17:29 GMT

That sounds like you were on a graduated repayment plan - not the old IBR, or the new PAYE/REPAYE. My gross income is over $65k/yr and my monthly payment is $27/mo under PAYE. If you've already refinanced them though, then it doesn't really matter anymore

Citizen's is a good company - I just refinanced my 2nd private student loan with them, because I could finally get an interest rate lower than the rate on that loan. I found too when I talked to them they use the same credit report for 90 days and since my existing loan with them is at a 1.2% higher rate than what they're giving me now, I can also refinance that loan to the new rate with no additional credit hit - and lower that payment by $55/mo. They just saved me $75/mo in payments, so I'm happy with them

They're also a little more lenient with their lending - my federal loans on IBR keep me from qualifying with SoFi and DRB which do give better rates than Citizens. SoFi and DRB fully amortize loans on IBR to determine what the full payment would be for calculating DTI - Citizens Bank uses your current and actual Fed Loan payment when calculating DTI. They also counted my rental income on my duplex the same way a bank would for a mortgage, where SoFi and DRB wouldn't consider it.

Re: Citizens Bank Refinance Education Loans

Anonymous — Tue, 03 Jan 2017 22:39:35 GMT

@Newbie01 ^^^ thx for sharing all the good information - funny my situation was almost like yours ... I also couldn't qualify with Sofi or DRB ... thought my credit wasn't high enough but if they fully amortized my over $110k in student loan debt is likely that was my issue as well - Dti .... Also as far as my govt loans I actually was on the IBR plan ... it was kike 450-500 after me appealing at fighting them and still was not lowering my balance it was increasing and it drove me nuts!!! Now I cant lie if I only had to pay 27 or $50 heck less than a $100, i would have glady paid that for my 20 years then let them forgive my balance

Re: Citizens Bank Refinance Education Loans

Anonymous — Wed, 04 Jan 2017 01:07:41 GMT

I've already decided when my IBR payment goes over $250 I will start looking for refinance privately - but for now, keeping my AGI low on my taxes, to keep that payment low is good incentive to contribute more to my retirement funds - that is the only reason I'm able to get my AGI low enough to get that low of a payment at my income. But I figure if I'm going to pay out the money either way - student loans or my retirement, might as well plan for retirement. At the end of the 20 years I will have paid in interest 3x more than what I actually borrowed, plus they'll collect taxes on the forgiven amount, so they're still going to make a butt load of money off me.

Re: Citizens Bank Refinance Education Loans

Anonymous — Wed, 04 Jan 2017 01:20:20 GMT

@newbie01 your smart ... with that 401k thing ... i know other people who contribute half of their income to retirement to avoid other stuff as well ... smart but it depends on stability as well ... one would assume like the others I know that you have your home and cars and kids are set ... because I want a bigger home in the next 5yrs or so ... have a kid in 8th grade and one 19 ... i still have to finance stuff ... thats when the contributions to 401 become an issue ... I contribute 10 percent now and thinking of increasing that to 15 percent ...anything above that and I wouldn't be able to qualify for large purchases due to the dti or that all so important cash flow ... and yes that student loan payment with citizens is my largest bill ... thats crazy huh ... they preach n teach everyone go to school but Its a catch 22 to the education game .... its like a scheme to me ... dont get me wrong wouldn't trade my degrees for anything and no one can take them from me but dam .. im at the same job for 17yrs went from secretary to vp and six figures without them even knowing I have any degrees ... its who u know .. we all know that .. now that were adults

Re: Citizens Bank Refinance Education Loans

Anonymous — Wed, 04 Jan 2017 06:25:21 GMT

Contributions to your 401k or any retirement account, don't lower your income for DTI calculations - DTI is figured based on your gross income.

I have a 12 yr old daughter, so I get it - like I said the money I put in retirement accounts would be gone one way or another - if not to retirement then to SL payments. I'm just choosing to pay one and not the other. Plus, if there is a major emergency I can withdrawal the money in my HSA (for a penalty) and take out a 401k loan, so it also gives added security that way. If it was going to student loans, it would just be gone. This way I still have access to most of it needed.

I agree with it being like a scheme too - higher education changed when the government made it so anyone could get a student loan. That's when all the for-profit schools started popping up. I did my undergrad right - 1st 2 years worth of classes at community college for cheap, and last 2 years worth at university. Since the state I was in capped out full time tuition and it didn't matter how many classes you took, I took as many as I could, and finished early, and finished cheap. I did graduate school wrong though - that where I screwed myself and racked up the debt.