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When I initially decided to take a minimalism journey, I had a couple specific whys. Many of these whys required more money and I knew that minimalism, along with some wise financial moves, would help me get to these goals. I want to travel more, I want to be able to sponsor and help more children in need, and be able to visit them as well. I also wanted to pay off my school loans. I knew by approaching these goals with minimalism, I would be on the right path of spending less by changing the way I think about things. By changing my values to be about people and 
experiences and not about possessions, I knew I would automatically be spending less on things I didn’t need, thus allowing me to have more money to spend on the people and experiences that were very important to me. I wanted to obtain this level of financial freedom, that is just so important to me. I also realized that I could help myself along this path of having more financial freedom if I was able to reduce the amount I would pay on my loans over time. Why pay big banks lots of extra money to make them rich, when I could be saving that extra money and using it to help me reach my goals. It was time to investigate options for reducing this amount!
So many of us are very young with not great credit, if any credit at all, when we first attended school. Then we attempt to take out loans, and if these are any post grad type loans (i.e Law School, MBA, Medical School) these loans can get very large very quickly! So of course, we are asking companies to loan us large amounts of money on very little credit history. This usually means that the interest rates are high and are usually accompanied with 20-40-year terms. Both the rates and the length of the loan make the companies a lot of money over the years.
Why would you want to stick with these personally unfavorable terms when you are now older, wiser, and usually have much better credit scores and history?? Especially when there are many companies out there who are willing to take these factors into their calculations and give you lower interest rates and shorter loan lengths, thus lessening the amount you pay over the life of your loan! SoFi claims that the average lifetime savings for borrowers who shorten the length of their loans save over 15,000!!! I knew that the best way to help me achieve my goals was to pay off these loans as quickly as possible!
When I first started to look into refinancing my school loans I had a couple big requirements, 1) I wanted something with no fees (I was not going to pay money to refinance, that just seemed to defeat the purpose); 2) I wanted to reduce my interest rate; 3) I wanted to reduce the length of my loan; 4) I was hoping to do both 2 & 3 without increasing my monthly payment (though on this one I was willing to be a little flexible within reason); and 5) I wanted to be able to get my parents off my loans (they had co-signed for me when I was in school, like a lot of parents do) and I didn’t want to have to include anyone else as a co-signor on these loans.
Next, I started to research a couple companies and asked a couple friends if they had any recommendations. One of my friends mentioned that they had used SoFi and the process was quick and easy, they had started an application with another company before using SoFi. They said they just felt like they were getting more and more requests for information and documentation from the other company and that the application was not moving forward after several weeks. So, they decided to investigate another company as a back-up and ended up with SoFi and that they had no problems and only one request for additional information and were approved and funded quickly! With this personal recommendation, I decided to give SoFi a try.
I started by simply looking them up and checking out their website. The first thing I noticed is that they did not have fees for refinancing school loans, so the first of my 5 requirements was checked off. Second, I noticed that you could check to see what your estimated interest rate and terms would be without it affecting your credit score. I really liked this feature, because I didn’t want to go through the application process, just to have them come back with an interest rate higher than I had already and have it negatively affect my credit score and thus effect my chances of getting a better rate with another company! So, I went ahead and put my basic information into their quick form and within seconds I had some estimates for interest rates for both fixed and variable interest rates, along with some term options. It appeared from this estimate that I would be able to lower both my interest rate and shorten my term and not pay more per month. I was instantly excited that I might be able to get all 5 of my desired requirements met!
The next step was beginning the application process. They asked for the basic personal information needed when applying to any kind of credit decision; information about when and where you attended school; and then some easy to obtain supporting documentation (i.e. pay stubs, W-2). I was personally requested to submit a couple additional documents, but they were also very easy to obtain, and I was able to get them back to them within a couple hours usually. I was surprised to get an approval on my loan and a rates and terms offer within about 36 hours after they received my last documentation. It was all so quick and easy!
On top of being quick and easy, I also received options that allowed me to see what the payments would be for different loan lengths and fixed v. variable interest rates. I was able to pick an option that would fit all my requirements! I was able to shorten the length of my loan by 7 years and still basically make the same payment every month, simply because my interest rate had reduced so significantly!! Also, the cherry on top was that I did not need a co-signor and I could officially take my parents off my loans, which was a really big thing for me. I did not want them to have to enter into retirement age with my loans on their credit reports, even though I was making all the payments.
After selecting the specific interest rate and loan length combination I wanted, I simply had to read and agree to all the terms and the loan was completed and funded. I could not have been happier with how easy and smooth this whole process with SoFi was! They really do make it user friendly and do not have a ton of hoops you have to jump through and I will be saving a significant amount of money over the life of my loans!!
For more money saving recommendations, head on over to my recommendations page!
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