I’d been using a certain website to track my accounts to get an aggregate view of most of my balances, but it recently shut down. 😦 However, I found another site and it’s great, much better even. 🙂 I can now track all of my accounts (spending and saving) in one place, and have everything automatically updated. Definitely an upgrade.
Using this new tool and looking at my accounts made me start thinking about ways to make improvements. 💡 So I took action.
Raising My Rate: Savings Account
I moved my Emergency Fund to another financial institution offering a high interest savings account. As a result of this move, my E-fund account interest rate will increase from 0.01% to 1.7%. I don’t know why I didn’t look into this earlier. Ok, so 1.7% isn’t keeping up with inflation, but it’s a fair sight better than the near 0% I was getting before.
My Opportunity Fund will now serve as my overdraft savings account fund that is linked to my checking account. That makes sense to me and I like the idea of having my emergency fund ‘farther away’ so to speak in a different bank and not quite so easy to access (~2 day wait).
Gain: This move will give me $170 in yearly interest earnings (instead of ~$1).
Lowering My Rate: Refinancing Student Loan
Two years ago, I refinanced my federal student loans into private loans for a low variable interest rate of 3.42%. Today, my student loan interest rate is currently a variable 4.98% and going up seemingly every month now. I’ve been hesitating about applying to other servicers because I really, really like the one I have. I have also been afraid because of the horror stories I’ve read about bad servicers out there (e.g. ‘accidentally’ losing payments which cause borrowers to rack up penalty fees and charges). Sigh. But with no end in sight to rising rates, I knew I had to do something.
So I submitted a loan refinance application…to my current servicer.
I was curious to see what would happen. To my surprise I got a response, and a decision (‘Approved’), the next day. Blazing fast!
I didn’t even know I could re-refinance with my existing servicer. I was sure the application would be rejected outright. Why should they offer me a lower rate if I’m already paying a higher one, right? Well, I’ve learned a lesson. If you don’t ask, you don’t get.
I’m still not out of the woods, as I have to submit a few additional small pieces of info, but if all goes smoothly, my interest rate will decrease. They’ve offered me a fixed rate at 3.25% and a variable rate starting at 2.57%. I assume that my recent pay raise combined with my smaller loan balance improved my debt to income ratio significantly and qualified me for a lower rate. And best of all, I get to stay with my current servicer. 😀 😎
I’m in love with that 2.57% variable rate. It’s almost half of what I’m paying now, but as I’m writing this post I’m leaning toward getting the fixed rate and being done with it. I know I only plan to keep paying on this for another year and a half, but any number of things could happen in that time frame which could cause a delay to my final payment date. This would only lead to another interest rate re-maneuver in the future as LIBOR rates will likely be significantly higher 18 months from now. Thus, I think going with the fixed rate interest (3.25%) mitigates some of that risk for me.
‘Loss’: This move will save me about $40/mo in lower interest payments from my current 4.98% rate.
With my interest rate quickly approaching, and soon to blow past, 5%, I felt like I was racing the interest rate clock. Now with this re-refinance in the works, I can lock down my payment dollar amount and have one less thing to worry about going forward.
If this all works out (cross your fingers for me), I will be a big fan of my servicer. Seriously.
It feels good to be taking some action to keep tweaking my finances, no matter how big or small.
What are you doing / have you done to optimize your interest rates?
No left hooks or uppercut payments this week, sadly. Kick back with a cool beverage and stay tuned.
“Debtor’s prison is real, and opportunity cost is a bitch.” (DDSW Archives)