My wife and I have a large sum of student loans (>150k together). She is now out of school and I'm in the latter years of a PhD program. So we both have steady incomes. My loans are from the government and my wife's are half-government/half-private.
We are considering taking out a private loan to pay off the entire sum of student loans (or at least a large-majority sum). I have great credit and I expect I can get an interest rate well below 5% (probably ~3.x%). The student loans have various interest rates well above 5%. With a quick back-of-envelope calculation it looks like we would save about 10 or 15 thousand dollars over the life of the private loan compared to the life of the student loans.
I'm trying to think about upsides and downsides to taking out the private loan. I've found surprisingly little about this on the web. Maybe most young students don't have good credit so this isn't an option.
- Save 10-15k over the next 15 years (due to lower interest rate)
- Private loans will be less flexible if we cannot make payments for some reason.
- Won't be able to continue deducting student loan interest payments. (I don't see this as a huge benefit since a couple thousand dollars in annual deductions doesn't seem compare at all the saving $15k.)
I appreciate any other additional pros/cons or overall advice.