no more fixed rate student loan consolidation at chase

D

dumb_mother

so i just got married and strapped with about 300,000$ (75k fixed at about 6.8% rest variable average of 7% right now) of student loans from my new wife. we went to the bank to try and consolidate them into fixed rates only to find that fixed rate loans are no longer offered in any manner from chase other than home loans.

so now i'm trying to find a way of consolidating into a fixed rate, but it seems the best i could do was a variable that started at 6.32 now so i imagine it is libor + 5.8 or so as most of them seemed to be pegged to libor. but i didn't read the fine print so i'm not positive on that one, i was mainly interested in a fixed rate so i more or less walked out when they told me that wasn't an option

now what i'm wondering is, how would i go about hedging this loan to simulate a fixed rate? or does anyone know of someone who is offering fixed rates....?

thanks for your help

dm
 
My friend has around $37k worth of student loan debt, long story short, had him call up Nelnet and Sallie May, NEITHER of them were willing to take on his loans for consolidation, I asked why? Said that due to economic conditions were not taking on any new loans, this was about a month ago, direct loans said they would try and work on consolidating the loans, process is still in the works 5 weeks later.
 
Purchase a floating rate bond with the same duration?

Enter a floating-for-fixed swap (don't know how to actually go about doing this for non-corporations)?

Buy caps (options on interest rates)?

Sell interest rate futures?
 
Quote from dumb_mother:

so i just got married and strapped with about 300,000$ (75k fixed at about 6.8% rest variable average of 7% right now) of student loans from my new wife. we went to the bank to try and consolidate them into fixed rates only to find that fixed rate loans are no longer offered in any manner from chase other than home loans.

so now i'm trying to find a way of consolidating into a fixed rate, but it seems the best i could do was a variable that started at 6.32 now so i imagine it is libor + 5.8 or so as most of them seemed to be pegged to libor. but i didn't read the fine print so i'm not positive on that one, i was mainly interested in a fixed rate so i more or less walked out when they told me that wasn't an option

now what i'm wondering is, how would i go about hedging this loan to simulate a fixed rate? or does anyone know of someone who is offering fixed rates....?

thanks for your help

dm
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I hope she got an education in a field that will allow her to make it back. if not you just took on a big obligation.
 
ok, so i was talking to a fund manager family friend of mine, he said the best way to try and do it was to:

sell short 10 year swap rate 10 years forward

now the problem is the swap market trades in mln+ sums and i just need a 250k one so i need someone to sell me that slice- now does anyone know where i can do this? i'll see him again in about a week but wanted to get moving on this if possible. where would i have to make an account to be able to do this
 
Why would anyone blow 300K for a diploma.

So now she is in debt 300K and what does she have to show for it? College is such a scam.

I am glad I never took that route.
 
Wow. I hope she's a plastic surgeon.

I paid $12k for my undergrad and currently another $10k for my masters (accountancy).

College isn't worth it anymore. Better off learning a trade.
 
Quote from dumb_mother:

ok, so i was talking to a fund manager family friend of mine, he said the best way to try and do it was to:

sell short 10 year swap rate 10 years forward

now the problem is the swap market trades in mln+ sums and i just need a 250k one so i need someone to sell me that slice- now does anyone know where i can do this? i'll see him again in about a week but wanted to get moving on this if possible. where would i have to make an account to be able to do this
More...
Firstly, I don't really understand why your friend suggested doing fwd-starting swaps. What's the structure of her liability? Surely, she doesn't have a 10y grace period? Or am I missing something...

Secondly, there's nothing cheap that you, as a retail investor can do (unless there's an ETF I don't know about). The closest thing that I can think of is US $ swapnote futures, but it's not perfect. However, it is the most direct hedge. Alternatively, something that's easier done, but it's not perfect, is to do it through treasuries.

Everything else will expose you to various risks you don't know or care about.
 
just did the 10 year swap 10 years forward because the loans are all 20 years and that would give me a long hedge without having to roll the position constantly, wanted to avoid the roll risk as if we truly enter a bond bear market they'll steal a couple percent from you each time you roll.

i initially thought i'd just short 3 ZB against it myself, but the amount i'd get skinned for each roll wasn't a risk i really wanted...
 
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