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Parent PLUS consolidation, Yeah or Nay?

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Parent PLUS consolidation, Yeah or Nay?

Hello Student Loan forum.  I don't think I have posted in here before!  Need opinions from experts.

 

As you can see from my sig, I am rebuilding my credit, and have a ways to go.   Asssuming my scores have improved a little in the next 3 to 6 months, I was wondering what my refi options might be, and if it makes any sense to even consider refinancing in the first place.  The facts:

 

  • I assume my scores will be in the 670-690 range across the board in a few months.  Fair, but not good, and not clean.
  • I have two separate Direct Parent PLUS loans in repayment, serviced by Navient.   
  • Both are essentially at 100%: $8000 (2011/7.6%)   and    $7000 (2015/6.9%).
  • Both are on separate graduated repayment plans, currently at the lowest level.
  • One of the loans is clean, the other has a single 90 late from 5 years ago.  There was a self inflicted problem exascerbated by Navient, but it was deferred and then cleaned up other than the single 90 day late.
  • Nobody involved in these loans are federal employees, and any future income based repayment relief is not likely to happen.

So, given the above, is it even likely there will be competitive refi options available to me? 

 

Navient has not been terrible to me, but they have not been great either.  There is not a lot of advantage to consolidating, other than getting a couple more paid loans on file, getting  a better loan servicer, maybe aging the delinquency off, and simplifying down to one fixed price payment instead of 2 graduating payments.

 

Is this something I should even be spending time thnking about?  I have no idea what the student loan refi market is.   

 

 

 

050719:     
081719:     

A regretful expert. I have repaired before, I will repair again. My current goal is 670 FICO08 across the board by November 2019.
Message 1 of 4
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Established Contributor

Re: Parent PLUS consolidation, Yeah or Nay?

This is a very interesting question. Usually I recommend not trying to refinance it as a private loan, but really you name a good case either way.

As a PLUS loan, you would only have access to income-driven repayment plans if you consolidate, and only the highest plan (ICR) at that. You would almost be better off with a standard repayment given what I assume is a very decent income and a comparably low loan balance.
On the other hand, you will lose all of the possible federal benefits. It's a gamble, but what if you become unemployed or injured? A federal loan consolidation could possibly have you covered.
The interest rate would be lower... Maybe. Not familiar with refinancing enough to know if you can get a solid rate quote before you apply and take the inquiry. But the interest difference.. Will it save you that much money on such a small set of loans?
Idk, I would probably still stick with a federal loan. I could see why you would consider it though and ultimately it's your choice to make. I could totally get choosing a private loan as well.
I hope I've helped you with the information I gave.
If not, please feel free to ask anything.



Message 2 of 4
Established Contributor

Re: Parent PLUS consolidation, Yeah or Nay?

Thanks @Sabii.

You were pretty much thinking what I am thinking.  I do believe I will revisit the question in a couple months, but I am not optimistic that it makes much sense or will be feasible.   It's this bit right here that is the big question, and I wish you had the answer Smiley LOL

 

  •  "Not familiar with refinancing enough to know if you can get a solid rate quote before you apply and take the inquiry. But the interest difference.. Will it save you that much money on such a small set of loans?"

 

I dont think it would save a ton on interest, but it might "compel" me to pay them off a bit quicker.  If I knew that refis under 7% wont happen, then the point is moot regardless.  I have no clue what refi % is reasonable or typical.     We will wait and see I guess.

050719:     
081719:     

A regretful expert. I have repaired before, I will repair again. My current goal is 670 FICO08 across the board by November 2019.
Message 3 of 4
Established Contributor

Re: Parent PLUS consolidation, Yeah or Nay?

If only I had *all* the answers! I am a woman. 😂

I'm glad you'll stick with the PLUS, at least for now. I've seen many people asking how to go from a private loan back to the PLUS.

There are also little details for each lender that may be hard to find but can make a big difference. Do you get charged extra if you pay it off early? What hardship programs do they have, if any? Is there a penalty APR if you miss a payment or it's late? When do they report lates to the credit bureaus (PLUS usually isn't until 90 days). Is the APR fixed or variable? How many late payments before they send you to collections (and there is no easy way out like rehabbing or consolidation for a federal loan)? Are the extra fees to refinance or make payment? How easy is their website to manage?
Someone on here said there are a couple of lenders that will give you a solid APR. I don't remember the names.
I would also recommend one of those student loan calculators online. They let you fiddle with the payments to see how different monthly payments will change your interest accrued or the time it takes to pay off the loan. Might give you a visual to commit to how you want to pay off the loan. Good luck!



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