I refinanced my student loans to get my cosigner off, and it healed our damaged relationship
- When I graduated college, I had $25,000 in private student loans that two different family members had cosigned. One of the loans was affecting my relationship with my aunt.
- I refinanced the loans and reduced my monthly payment by about $30, while cutting the term of the loan by five years.
- At the same time, I improved my family relationships and am glad I'm now the only one tied to my debt.
- Refinancing your student loans is easy. Earnest, CommonBond, or SoFi can help. Get a quote today »
Not long ago, I would dread seeing my aunt's number on my phone. Years before, she had generously offered to cosign an $18,000 student loan, which allowed me to attend my chosen university. It was a huge gift, and I was very thankful for it.
However, in the 10 years since she'd cosigned the loan, our relationship had become strained. Her own kids were in college, and her financial situation had shifted. Although she had agreed, by cosigning, to stick with me for the life of the loan (a shocking 25 years), she really wanted off.
The problem was, I wasn't able to refinance. I was self-employed, and getting approved for an unsecured loan like a student loan refinance was hard. We were both frustrated.
I wanted her off the loan just as bad as she wanted to be off. And yet, since I couldn't qualify to refinance, we both just stewed in our frustration. Every time we talked, even if the loan didn't come up, it was there, just beneath the surface of our conversation.
Getting approval for refinancing
Finally, last year, I made enough money that I knew I should be able to qualify for refinancing. In addition, my credit score had improved, so I thought I could probably get a significantly lower rate than I had on the cosigned loan.
Honestly, though, I wasn't as concerned with the money as I was with getting my aunt off the loan. It was affecting our relationship, and that tension was causing residual stress in my life.
One night, I applied through my credit union for a student loan refinance. Initially, I applied to refinance the loan that my aunt was on, which now had a balance of $15,000. I was paying about 9.5% interest and just not getting ahead, despite having made payments consistently for more than 10 years.
As I was doing the application, I decided to try to refinance a loan that another family member had cosigned as well. My relationship with that family member was fine, and the loan had never once come up. However, I was 30 years old now and liked the idea of my finances, even my debt, to be solely my own. That second loan had a balance of about $10,000 and an interest rate of 8%.
All together, I was able to refinance just over $25,000, at a 5.5% interest rate. Now, my monthly payment is $271 for the next 10 years; before, I had been paying about $300 combined for the loans, and would have about 15 years left to repay. I'll save a little bit each month, and a lot over the five years that I cut off the loan term.
Refinancing your student loans can save you money. Get a quote today from Earnest, CommonBond, or SoFi »
Healing my relationship
As soon as the loan application went through, I called my aunt. I let her know that, within a month, we would each be getting a notice that the loan balance was paid in full.
"That's so great," she gushed, clearly surprised. "Thank you so much."
Sappy as it sounds, it was like a weight had been lifted from our relationship. In that moment, we reconnected without the strain of a shared financial burden. I was genuinely thankful for her support in cosigning the loan. Without it, I wouldn't have been able to go to the school I wanted, and I likely would have had a different career trajectory.
At the same time, my aunt was grateful that I refinanced the loan and ended her financial obligation. She knew that I didn't have to refinance it - we had agreed to be in this together - and she appreciated the fact that I prioritized her feelings on it.
For my other family member, I wrote a nice note. I described how much I appreciated his support and the fact that he had never let the loan affect our relationship.
Both interactions were so positive and filled with love. At the same time, it felt wonderful to know that I was the only one responsible for my debt.
Moving forward
It's been four months since I refinanced my loans. Having student loans still stinks: In addition to the two I refinanced, I pay about $100 in federal loans each month as well.
Refinancing couldn't remove the financial burden of the loans, but it did quell the mental and emotional burdens. Having one payment for my private loans, and knowing that the debt is only in my name, make having student loans feel much more manageable.
Wondering if you qualify for a student loan refinance? Get a quote today from Earnest, CommonBond, or SoFi »
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