Student loan debt has skyrocketed in recent years, and many young people are looking for ways to get out from under it as quickly as possible. There are various ways to reduce your student loan payment, including student loan forgiveness programs and refinancing options with private lenders. Here are seven of the best ways to get your payments down fast.
- Refinance at a Lower Rate
Refinancing your student loans with a new lender can offer a lower interest rate, resulting in lower monthly payments. If you have federal student loans, they’re eligible for refinancing through Federal Direct Consolidation Loans.
- Consolidate Your Federal Loans
According to Ascent, one great way to reduce your student loan payment is by consolidating your federal loans through a Direct Consolidation Loan. This can be beneficial if you have more than one loan because you’ll only have one monthly payment instead of several.
- Look into Income-Driven Repayment Plans
This is a great way to save money. They allow borrowers to lower their monthly payments by making it less than 10% of their discretionary income. For example, if you have federal student loans or have a mix of private and federal student loans, contact your loan servicer for details on how to enroll in an income-driven repayment plan.
- Choose Your Repayment Plan Wisely
If you can pay more than your required monthly payment, then it’s a good idea to do so if you want to get rid of your debt faster. You can make extra payments at any time and as often as possible. However, keep in mind that specific repayment plans may have fees for making additional payments. Therefore, it’s important to understand your options before choosing a plan.
- Consider Public Service Loan Forgiveness (PSLF)
If you’re struggling to make your payments every month, it might be time to consider a program that could forgive all of your debt after a decade or more. One such program is Public Service Loan Forgiveness (PSLF), which could wipe out up to $17,500 in federal loans—more if you have a mix of private and federal student loans.
- Request a Forbearance
If you’re struggling to make your payments, one of your options is forbearance. This option allows you to defer your monthly payments for 12 months while figuring out a repayment plan. (Your loan will continue accruing interest during that time, though.) With forbearance, it’s important to pay attention so that you don’t end up defaulting on your loans.
- Get Rid of High-Interest Rates Through Deferment
If you have federal student loans, you mostly have fixed interest rates. However, if you have private student loans, you may be able to take advantage of a deferment program that will lower your monthly payments.
While student loans can be a worthwhile investment, you must take steps towards repaying them. This will keep your credit score in good standing and save you money in interest payments. So, start working on paying off those loans as soon as possible.
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