Ways to Lower Your Monthly Student Loan Payments
Whether it’s to fulfill your thirst for learning or to secure a brighter future, attaining a higher education is a dream for so many people.
Unfortunately, it costs a lot of money to earn a college degree, and to make the dream of achieving a secondary education a reality, a lot of collegiates take out student loans.
Someone who takes out a student loan may not expect to have difficulties repaying it; however, once the reality of post-college life sets in, a lot of graduates quickly discover that it’s difficult to keep up with payments.
There may be several reasons why it’s hard to manage student loan payments such as the inability to find a job, pay cuts, unexpected expenses and other unforeseen financial obstacles. Missing payments or completely defaulting can spell disaster for your finances. No matter what the reason, if you are finding it hard to repay your debt, you’ll be happy to know that there are ways that you can lower your monthly payments and make them more manageable.
Here’s a look at how you can pay less for your student loans each month.
Look Into an Income-Driven Repayment Plan
If you have a federal student loan, an income-driven repayment plan can help to lower your monthly payments.
By taking advantage of this type of repayment plan, your payments will be reduced to a percentage of your income – between 10 and 20%, subject to the type of plan. Depending on your situation, your monthly payment could be $0. These plans also provide forgiveness on remaining balances after a period of 20 to 25 years of making payments.
There are four different income-driven repayment plans available, including:
- Pay As You Earn
- Revised Pay As You Earn
Consider a Student Loan Repayment Assistance Program
A student loan repayment assistance program is another way that you can lower your monthly payments. This assistance is provided by several organizations, including government agencies, states, and non-profits. It’s used as a way to attract people who are qualified to work in these organizations.
A student loan repayment assistance program can help you drastically reduce your monthly payments, it may be worth finding out if you can take advantage of this free help.
Think About Refinancing
If your loans were issued by private lenders, options to reduce your monthly payments are limited. Refinancing can be a money saver if you are tired of making high-interest rate payments.
When you refinance, your previous student loans are replaced by a new one via a lender. With this option, the interest rate on your loan is lowered, the repayment period is extended, or both occur, and thus, your monthly payments are lowered. To qualify for refinancing generally you need good credit in the 600s or higher and need to have a steady income.
Deferment or Forbearance is Also an Option
If you need to completely stop making payments for a period of time, deferment or forbearance are options that you might want to consider, as they will put a temporary pause on your monthly payments.
Economic hardship, a disability, returning to school, serving in the military, or unemployment could allow you to qualify for a deferment. If your loans are subsidized, they won’t accrue interest
If forbearance is granted, your payments will be paused; but, interest will continue to accrue.
Once you commit to a student loan, you are responsible for managing repayment. If your monthly payments have become too difficult to make, you don’t have to struggle or damage your financial future. To find out the most effective solution for lowering your monthly student loan payments, contact the Tayne Law Group, P.C. We’ll help you determine the best way to reduce your payments and keep up with repaying your student loans.