Here’s a screenshot of my student loan balance over the years. The balance you’re seeing is my combined undergraduate and graduate programs. Oh, how I wish I had parents who could have helped me pay for school. I’m envious of the classmates and SRNAs who go through their nurse anesthesia program debt-free. I refinanced my student loans a few times. The first time was with SoFi because I could not fathom paying back my government and private loans at such a high rate. 3.5% through SoFi was pretty good. That was until I came across First Republic which was and is offering THE lowest rates you’ll ever find for student loans. Initially, I refinanced to 1.95% over 5 years because I was hell bent on paying my loans down.
That was until I came across an incredible opportunity to purchase a rental property that has allowed me to earn more money versus paying down my student loans. As a result, I ended up refinancing my First Republic loans to 2.60% over 10 years in order to free up money to focus on renovating the rental, which allowed me to increase my rent by nearly ~32%. My monthly payments are now $944 compared to $2,118, freeing up over $1000 a month for me to invest in the property. Sure, the overall interest that I’ll be paying with the 10 year versus 5 year loan is over $7,000, but I’m making that back in the form of rent within the first year of renting.
Plus, and this is one of those stupid mind games we play with ourselves to justify spending (losing) money to interest payments, I figured that the additional $7,000 can easily be made up with working 8-9 private practice shifts. Easy! That’s 2 weeks of extra work in order to extend my loan balance from 5 to 10 years. Plus, if you think about, the longer you hold off on paying your student loans off, especially with such a low interest rate, the cost of borrowing that money actually diminishes over time, particularly when you take into account inflation.
Since obtaining the rental property, I’ve pivoted my thinking from wanting to pay off my loans as quickly as possible to maximizing the value of the money I’ve made in the form of other investments. So as long as those investments are earning more than what I’d save in interest payments by paying down my student loans, then I’m good to go.