<p>Hello,</p>
<p>My freshman year, it tuned out that my parents didn't have the money they told me they had for college. I was already packed to go, and we had to scramble for money (essentially, my father wasted all of my college fund and spent all the money my grandparents gave me which was supposed to go to my first year of college.) We then ended up with a personal student loan in my name. My father, who is domineering and thank goodness I have now minimal contact with him, ended up getting a discover student loan with a variable interest rate. Fast forward to now, I left UC Berkeley because taking out loans each year wasn't sustainable and went to community college for two years. I'm now transferring to USC in the fall where I can afford tuition on my own (thank goodness!) </p>
<p>Looking at that student loan, the principle was around $25,000 and it already has near $4000 in interest acquired at 7%. Is there a way I can refinance the loan while I'm finishing my engineering degree? (3 years more, which is 3 years more interest) I do work and have a credit score above 700, but I don't know if I can refinance to a lower, at least perhaps fixed fee. Does anyone have any advice on how to manage this? Would starting to pay off the interest even help?</p>
<p>It is a private loan, so a private lender can do anything it wants including allowing a refinance. However, you are unlikely to find a rate under 7% or another product that you like better. No lenders make $25k loans, unsecured, to people without jobs to qualify (and even then, they don’t make them). Student loans are made at favorable rates (yes, 7% is a very favorable rate for an unsecured loan) because they are non-dischargable in bankruptcy.</p>
<p>I think what you should try to do is pay the interest while you are in college. You may get tax benefits and it will keep it from growing while you are in school. If you get any bonuses, like a tax refund, pay as much as you can.</p>
<p>I think what you are asking is can you refinance or consolidate it with your Stafford loans. You can never do that. Only certain govt issued loans are eligible for consolidation, income based repayment, forgiveness. You’ll just have to deal with Discover.</p>
<p>Yeah, I understood about the Stafford loans. I should be able to pay my car off soon (I’m a commuter student and I had a terrible junk car before. Finally decided with my income to get a decent car that’s not 20 years old!) I think I’ll start paying down that interest with my leftover income since I work part time during the year as well. I may call Discover and ask them what I can do, but I doubt they can really do much. </p>
<p>Interesting how I was able to get a car loan from Volvo with a better rate than my student loan! But then again, I did have work income when I got my car loan vs my initial student loan as a freshman. </p>
<p>I guess once I graduate and have a stable income (engineering should pay out nicely hopefully!) I can think about finding a better loan rate and for now, try to control the beast that is interest. </p>
<p>Any idea how much your dad spent of the money your grandparents saved for your college expenses? Perhaps your dad would pay the monthly interest on the Discover loan, for starters.</p>
<p>No, you won’t get a better rate. Your car loan is a secured loan, your student loan is unsecured. Car loans through a dealer are usually ‘loss leaders’ meaning the company is paying down the loan to get you in the door, and that money is backed into the cost of the car, dealership, commission. You won’t get a 0.9% rate at a bank. What you might be able to do in the future is get another loan (secured? say if you pay off your car and then can use it as collateral?) and then pay off the student loan entirely and then pay the lower rate on a secured loan. </p>
<p>Yes, pay the interest as best you can because it is compounded, and you will pay interest on the interest. A 7% rate is not horrible, so just keep plugging away at it. People used to have home loans at 10%+</p>
<p>Got it. Thanks! I guess I was just terrified seeing it climb up and up and unable to do anything for a while since I still had to keep saving money for when I transferred and pay all my bills and day to day living expenses and such. I’ll pinch more pennies where I can and try paying it down asap</p>
<p>@madison85 It was at least 15 k. In total, my mom suspects it was closer to around 23 to 25k, which is what my loan is for. I doubt it. He believed that the money he took was to pay back for the expenses of raising me (which I don’t see why he would have children in the first place with that mentality) and he still believes that I should owe him more money because he paid to raise me. </p>
<p>@eilrymist Wow, I am sorry to hear that.</p>
<p>@Madison85 Thank you. Everyone has difficult circumstances one way or another at one or more points in life 
So many are worse off than me, and I’m happy to be able to continue my education.</p>
<p>How are you paying for the second year of college?</p>
<p>Wow OP, you have an incredibly mature and inspiring attitude toward your situation – I just wanted to say that you are to be commended. Best of luck to you as you continue your studies and launch into your career. The personal qualities you drew upon, the motivation and determination you obviously possess, and the resilience you had to develop will serve you well in your future (not a substitute for the money, but valuable assets, nevertheless).</p>