FitBUX Stories is a collection of articles written by Members and Non-Members of FitBUX. The purpose is to provide positive encouragement to others who have found themselves owing a lot in student loans. Some stories also detail “Student Loan Horror Stories” so we can learn from each other.
This story highlights two very important lessons at the end so be sure to read them.
If you’d like to contribute your story, simply send us an email at firstname.lastname@example.org. We would love to hear YOUR story.
Saving Money While Chasing A Dream
I remember asking my Grandmother why she came to America. “Freedom” was her answer. Freedom gives us the opportunity to set our own course through life.
For many of us, opportunity is the dream of being self-employed. Building a business doing something we love and provide for our families.
James is one of those individuals who decided to pursue this dream.
James spent three long and grueling years pursuing a Doctorate in Physical Therapy. After completing his education, James went to work as a staff PT working 40 hours a week.
However, he didn’t see himself doing this for the next 35 years. So he began laying the foundation of his company. Ask anyone that has ever started a business….its not as easy as it sounds. Especially when you work in a heavily regulated business like healthcare.
This did not stop James though. After many hours, days, weeks, and months of hard work, his business was ready to go so he decided to quit his nine-to-five PT job.
One Area Overlooked
James’ business began to take off and generate revenue. Now was the time to get the rest of his finances in order. As many of you know, finances for many new grad equals student loans.
Many new business owners love all the new tax write offs they can take advantage of. One thing they often forget about is that said deductions reduce your taxable income. That in turn, can make it more difficult to secure a loan since lenders take into account one’s debt to income ratio (DTI) when making an underwriting decision.
In addition, when you are self-employed, most lenders (student loan refinance companies, mortgages, car loans, etc…) require one of two things to get a loan:
- You have to be in business for two years, or
- You have to be in business for one year AND show the same level as income as the year before when you worked your 9 – 5 job.
That was bad news for James: he had been in business for less than 2 years and while his business was growing and generating income, it wasn’t generating near what he was making as a nine to five staff physical therapist.
The Problem With His Student Loans
James could afford his monthly payment for his student loans but his rates where really high. He knew he could benefit by refinancing his student loans and dropping his interest rate.
James decided to look into refinancing and went to a handful of lenders. However, he continually got denied.
Bad News & Good News
As part of FitBUX’s free student loan refinance service, we check in at least weekly while one of our Members is going through the refinance process. So James’ FitBUX Coach sent him an email to see how the process was going.
James was initially excited because Splash Financial was quoting him a really good rate. However, this excitement soon turned to disappointment. After he uploaded his income he received a denial email….you guessed it, his income wasn’t sufficient.
However, as I highlight in our 2019 Splash Financial Review, FitBUX has a good relationship with our reps at Splash so we reached out to see if there was any way to qualify James for the loan.
The Reason He Was Denied
Like (mostly) everything in life, there is always a process people or companies follow to get to an answer or decision.
For student loan refinance companies, their process has to be extremely streamlined because of the stringent regulations they have to comply with and the volume of applications they receive. Therefore, most steps of the application process automated.
When we contacted Splash Financial, we asked if it would be possible to have James go through a manual review because this was a special case.
A few days later, James was approved! Now he will be able to save money and not worry about his student loans. He can focus on creating his opportunity and taking advantage of his new found freedom.
Two Lessons Too Learn
There are two really important lessons about money we can learn from this story:
- If you are going to start a business and think you will need to borrow money (refinancing your loans, securing a car loan etc), do so before quitting your 9-to-5 job and the associated predictable income.
- Not all student loan refinance companies are created equal. If you get denied from one you may get approved by another.
If you’d like to read more about student loan refinancing, check out our page dedicated to refinance articles and be sure to read our Ultimate Student Loan Refinance Guide. Want to read more about money? Check out FitBUX’s blog.