November 2, 2016
My wife has a multiple student loans at high interest rates (around 7%). She has loans under her name and under he parents names. She is currently paying off all loans separately since she cannot consolidate them. She has tried to refinance her loans with all these loan companies known to lower your interest rate to make it more affordable. When applying to refinance the companies cannot offer her a better rate. They claim it is based on your salary, credit score, and degree all of which are excellent. The monthly loan payment is high percentage of her paycheck and does not allow us to save any money and live paycheck to paycheck even though we make good money. Does anyone have a solution or company to help refinance or to buy-out or consolidate all her loans for one or two affordable payments? Please help, any solutions will be life changing.
May 3, 2014
It sounds like you and your wife are doing all of the right things.
Fixing the debt to income ratio is not an easy solution, however, it is something that will improve over time. As you eliminate any debt completely, be it a student loan or a car loan, your debt to income ratio will improve.
The best way to improve your debt to income ratio quickly is to attack low balance but high monthly payment loans. As an example, if you have a balance of $2000 on a loan but have to pay $500 per month, it is much better to pay off that loan than it is to pay off a $5000 balance loan that has a monthly payment of $100. The key is reducing your monthly debt obligations.
As you eliminate debts from your credit score or improve salary, your debt to income ratio will improve. Once a monthly payment or two is eliminated from your credit report, it might be time to revisit the refinancing companies. At that time you may qualify for a better rate.
For now, I'd pick a loan with a higher monthly payment and a lower balance. Try to get that loan paid off as soon as possible while just making the minimum on all the other loans. Once this loan is eliminated, see if it makes a difference on your applications. As loans are eliminated you will get better refinancing offers.
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