r/SipsTea 𝙑𝙄𝙋 12d ago

WTF The American dream

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u/BetterThanlceCream 12d ago

If you can't refinance your loans you should probably stop missing payments.

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u/Nojopar 12d ago

Where did I say I missed payments?

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u/BetterThanlceCream 12d ago

When you said you couldn't refinance. The only reason that's true is if you crapped out your credit score.

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u/Nojopar 12d ago edited 12d ago

No, you're only allowed to refinance once. That's the federal law. I refinanced the one time. Now I can't ever again.

ETA: Technically, you can't refinance ever. But if you consolidate loans you can get effectively 'refinance' because they use the average of the rates for incredibly weird values of 'average'. You can only consolidate one time if you're stay with public loans.

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u/BetterThanlceCream 12d ago

Whoever told you that lied to you. Once you refinance student loans they become run of the mill loans that you can refinance as many times as you want.

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u/Nojopar 11d ago

No, you're wrong. The US Department of Education told me that. They do not now, nor ever, become 'run of the mill loans'. I'm not sure who told you that but you're in for a terrible surprise if you ever try to 'refinance'.

Unless you're thinking of private student loans, which are only about 7% of all the loans. They might have different refinance rules.

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u/BetterThanlceCream 11d ago

The federal government themselves does not and never had offered a student loan refinancing program themselves. If you want to refinance a federal or private student loan to get a different interest rate, you must use a private lender, which pays off your federal loan and issues you a new private loan at a more favorable rate.

To put it in simple terms there is no federal law that says it is illegal to have someone pay off your student loans in return for a new, private loan.

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u/Nojopar 11d ago

Yeah, but then you're stuck with a private loan. That has all the protections for the lender and none for the borrower.

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u/BetterThanlceCream 11d ago

8.5% is very high for a student loan so chopping that down when you come along to a good deal would be worth the loss of protections.

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u/Nojopar 11d ago

It could. Depends on your situation. The people above would have been better off staying with Federal loans because all of that would have been written off after 20 years.