Drowning in Student Loans, Meg Found Help Through LendKey
As a bright, involved high school student, Meg C. – a 27-year-old from Des Moines, Iowa – knew she wanted to go to college. Her counselors pushed her to consider some of the best schools, no matter the price tag. That’s how Meg ended up getting her psychology degree from Wartburg College.
But the prestigious private college cost Meg more than she had budgeted for. Upon graduation, her student loans stood at more than $100,000! The number shocked her. Between federal and private loans, Meg had to put more than $1,200 a month towards her debt. As a newly minted graduate, $12,000 accounted for close to 60 percent of her take-home pay. And her private student loans had interest rates hovering close to 10 percent, so her monthly payments barely dented the principal balance.
But that wasn’t even Meg’s worst problem.
Different banks bought and sold her private student loans, and with each sale, the bank reset the amortization schedule and changed the interest rates. That meant that a loan that should have been paid off in 2022 wouldn’t be repaid until 2027 or later.
“It felt like payments were going nowhere but up, and I was going to pay off the loan even later.” The structure of her private loans left Meg exposed to the banks’ whims, and she had no recourse.
As Meg slogged towards freedom from student loan debt, the end date drifted further into the distance. She knew she couldn’t go on like that. Something had to change.
And so, on a friend’s recommendation, Meg turned to LendKey to refinance her private student loans. LendKey is a company that works with community banks and not-for-profit credit unions to make it easier for their clients to find low rates from banks that prioritize people over profits.
Meg didn’t have to visit a dozen bank branches to find a low-interest student loan refinance option – LendKey did the legwork for her.Click To Tweet
In just a couple of minutes, Meg applied for a student loan refinance through LendKey’s online portal. And to get better lending terms, Meg’s mom even agreed to co-sign on the loan. Whenever they had questions, they reached out to a LendKey customer service rep via email.
Meg describes the customer service response time as instantaneous. “If I had a question, I would shoot off an email. I always got a response within minutes. This was so easy for me. I’m in front of my email all day anyway, so that’s how I like to communicate.”
Within a few days, Meg was approved for a 15-year variable-rate loan. The interest rate is substantially lower than her prior loans – down from 10 percent to 5.79 percent – which frees up a fair bit of cash flow.
At a 10 percent interest rate, Meg had to pay $10,000 a year just towards interest.Click To Tweet
But every percentage point reduction in interest reduced the interest she paid by $1,000 per year.
In Meg’s mind, the 15-year schedule is even more important. Meg’s loans had previously been on a 10-year payoff schedule. The aggressive schedule left little room to save money for emergencies or to invest for the future.
With more time to pay off the loans, Meg has lower payments that free up cash flow and allow her to take a more balanced approach to financial wellness.Click To Tweet
And that free cash flow is incredibly important now that Meg is transitioning into a new career. She recently took on a role as sales representative for Staples promo products, and she’ll be working from home with a more variable compensation structure.
With the burden of student loan debt lifted, Meg can look forward to a more fulfilling future. She can’t wait to grow in her career, enjoy time with her family, and have a life.
LendKey helped Meg find a loan that not only solved her problem, but dramatically changed her life. If you’re struggling with student loans, reach out for help, look around, and do a bit of your own research. LendKey may have the right loan option for you, too.