Module Number 12 Refinancing Student Loans with a Private Lender Paul S. Garrard Founder and President, PGPresents, LLC Independent Student Loan Consulting Spring 2019 2019 PGPresents, LLC - All Rights Reserved

Private refinancing Trading debt for debt (may include federal and private loans) The bait is the rate Generally based on credit, debt-to-income ratio (DTI), employment history May be risky during residency, even if lender offers token payments during training Advantages and disadvantages

Pros and cons Advantage Disadvantages Potential substantial savings in total repayment costs when compared with federal loans Disadvantages Loss of repayment flexibility inherent with federal loans Eliminates any possibility of Public Service Loan Forgiveness

Should you refinance You may be a candidate if you Are ready to start active repayment, perhaps aggressively Don’t need an income plan and are not interested in PSLF** Are not concerned about postponement Have strong credit, favorable debt-to-income ratio, solid employment history * Income Driven Repayment plans ** Public Service Loan Forgiveness

Should you refinance You may not be a candidate if you Need to be cautious with payments Need payments tied to income Are interested in forgiveness, especially PSLF* May need to postpone payments Are risk averse * Public Service Loan Forgiveness

Questions to ask Interest rates Repayment options Fixed versus variable On variable rate loans Maximum and minimum rates How often rate is reset How much notice given Repayment options Usually shorter term nets better rate

More questions to ask Postponement options Cosigner requirements and cosigner release Forgiveness provisions Death or disability Not talking about PSLF

More questions to ask Assumptions behind projected amounts you may save that they provide you Will preliminary application result in hard or soft credit pull

Closing comments You cannot undo refinancing You don’t have to refinance all your loans Don’t commit to challenging cash flow just to get a low rate Carefully consider whether token payments are worth it when compared with income payments that might count towards PSLF during training Private student loan debt not factored into income payments for spouse

PGPresents, LLC Independent Student Loan Consulting www.PGPresents.com END OF MODULE 12 PGPresents, LLC Independent Student Loan Consulting www.PGPresents.com 2019 PGPresents, LLC - All Rights Reserved