Looking for some help, perspective, insight, and predictions here...
I'm in the process of refinancing my student loans from grad school. My FedLoan rate is currently about 7.2%. (This is a blended rate - I have a handful of loans at 7.9% and a handful of loans at 6.8%.) It compounds monthly.
I'm refinancing through SoFi. They've given me 2 options:
A fixed rate (5.9%) for 10 years.
A variable rate (3.75% + 1 month LIBOR) for 10 years.
I'll make consistent monthly payments, paying the minimum payment, plus a bit extra toward the principal every month.
If I pick the variable rate, and the LIBOR continues to stay nice and low for a few more years, I'll save a bit more over the life of the loan repayment (and have my loans paid off much more quickly).
If I pick the fixed rate, I won't save as much, but I'll sleep better, blah, blah, blah.
So my question is: is there a reasonably high percent chance that LIBOR is going to rise to 2, 3, 4% within the next 3-4 years?
I'm pretty sure that I've already chosen which rate I'm going to take, but I wanted to get perspective from the brilliant minds of the CAPS blog. :)
Thanks to all.