Are you paying too much for your student loans?
Student loan payments can be expensive. If you have high student loan payments, it may be challenging to save for retirement, buy a home or pay other living expenses. So, how can you lower your student loan payments?
Here are 11 ways to lower your student loan payments:
- Enroll in an income-driven repayment plan
- Sign up for a Graduated Repayment Plan
- Sign up for an Extended Repayment Plan
- Consolidate student loans
- Enroll in automatic payments
- Apply for student loan forgiveness
- Move to a new state
- Ask your employer for help
- Choose a longer student loan repayment term
- Increase your credit score
- Refinance student loans
Compare The Best Student Loan Refinance Rates For 2020
Overview
| Key | Value |
|---|---|
| Variable Rates: | 1.99% – 5.64% |
| Fixed Rates: | 2.98% – 5.79% |
| Minimum Credit Score: | 650 |
| Minimum Income: | None |
| Fees: | None |
| Minimum Loan Amount: | $5,000 |
Details
| Key | Value |
|---|---|
| Eligible Loans: | Private & Federal |
| Eligible Degrees: | Undergraduate & Graduate |
| Loan Terms: | 5-20 years |
| Borrower Residency: | All States except KY or NV |
| Hardship Deferment: | Yes |
| Co-signer Option: | No |
Overview
| Key | Value |
|---|---|
| Variable Rates: | 2.39% – 6.01% |
| Fixed Rates: | 3.19% – 5.99% |
| Minimum Credit Score: | 680 |
| Minimum Income: | $35,000 |
| Fees: | None |
| Minimum Loan Amount: | $15,000 |
Details
| Key | Value |
|---|---|
| Eligible Loans: | Private & Federal |
| Eligible Degrees: | Undergraduate & Graduate |
| Loan Terms: | 5, 7, 10, 15, 20 years |
| Borrower Residency: | All States |
| Hardship Deferment: | Yes |
| Co-signer Option: | Yes |
Overview
| Key | Value |
|---|---|
| Variable Rates: | 1.99% – 7.10% |
| Fixed Rates: | 2.88% – 7.27% |
| Minimum Credit Score: | 660 |
| Minimum Income: | None |
| Fees: | None |
| Minimum Loan Amount: | $5,000 |
Details
| Key | Value |
|---|---|
| Eligible Loans: | Private & Federal |
| Eligible Degrees: | Undergraduate & Graduate |
| Loan Terms: | 5 – 20 years |
| Borrower Residency: | All states |
| Hardship Deferment: | Varies |
| Co-signer Option: | Yes |
Overview
| Key | Value |
|---|---|
| Variable Rates: | 1.99% – 6.24% |
| Fixed Rates: | 2.99% – 6.24% |
| Minimum Credit Score: | 650 |
| Minimum Income: | None |
| Fees: | None |
| Minimum Loan Amount: | $5,000 ($10,000 in CA) |
Details
| Key | Value |
|---|---|
| Eligible Loans: | Private & Federal |
| Eligible Degrees: | Undergraduate & Graduate |
| Loan Terms: | 5, 7, 10, 15, 20 years |
| Borrower Residency: | All states |
| Hardship Deferment: | Yes |
| Co-signer Option: | Yes |
Overview
| Key | Value |
|---|---|
| Variable Rates: | 1.99% – 6.65% |
| Fixed Rates: | 3.20% – 7.02% |
| Minimum Credit Score: | 700 |
| Minimum Income: | None |
| Fees: | None |
| Minimum Loan Amount: | $5,000 |
Details
| Key | Value |
|---|---|
| Eligible Loans: | Private & Federal |
| Eligible Degrees: | Undergraduate & Graduate |
| Loan Terms: | 5, 7, 10, 15, 20 years |
| Borrower Residency: | All States |
| Hardship Deferment: | Yes |
| Co-signer Option: | Yes |
Overview
| Key | Value |
|---|---|
| Overall Rate: | 1.95% – 3.85% |
| Variable Rates: | – |
| Fixed Rates: | 1.95% – 3.85% |
| Minimum Credit Score: | None |
| Minimum Income: | None |
| Fees: | None |
| Minimum Loan Amount: | $25,000 |
Details
| Key | Value |
|---|---|
| Eligible Loans: | Private & Federal |
| Eligible Degrees: | Undergraduate & Graduate |
| Loan Terms: | 5, 7, 10, 15 years |
| Borrower Residency: | Must live near a branch in California; New York City; Boston; Greenwich, Connecticut; Palm Beach, Florida; Portland, Oregon; or Jackson, Wyoming |
| Hardship Deferment: | No |
| Co-signer Option: | Yes |
Overview
| Key | Value |
|---|---|
| Variable Rates: | 2.61% – 5.25% |
| Fixed Rates: | 3.39% – 7.75% |
| Minimum Credit Score: | 680 |
| Minimum Income: | $24,000 |
| Fees: | None |
| Minimum Loan Amount: | $5,000 |
Details
| Key | Value |
|---|---|
| Eligible Loans: | Private & Federal |
| Eligible Degrees: | Undergraduate & Graduate |
| Loan Terms: | 5, 7, 10, 15, 20 years |
| Borrower Residency: | All states, except ME, ND, NV, RI, WV |
| Hardship Deferment: | Yes |
| Co-signer Option: | Yes |
Enroll in an income-driven repayment plan
If you have federal student loans and want to lower your student loan payment, you can apply for an income-driven repayment plan. An income-driven repayment plan extends your Direct student loan repayment term to 20 years or 25 years, and your monthly payment is based on your discretionary income, family size and other factors. Some borrowers pay as little as $0 per month.
There are four types of income-driven repayment plans:
- Revised Pay As You Earn (REPAYE)
- Pay As You Earn (PAYE)
- Income-Based Repayment (IBR)
- Income-Contingent Repayment (ICR)
Sign up for a Graduated Repayment Plan
Sign up for an Extended Repayment Plan
An Extended Repayment Plan helps you lower your monthly student loan payment for your federal student loans. With an Extended Repayment Plan, you can extend your student loan repayment term from 10 years to as long as 25 years. To qualify for an Extended Repayment Plan, you must have Direct or FFEL federal student loans with a balance of at least $30,000.
Remember, when you increase your student loan repayment term, your monthly payment decreases, but your total interest payment increases. Interest still accrues on your student loan balance even if your monthly payment is lower.
Consolidate student loans
You may have different federal student loans, each with different interest rates, balances and payment due dates. How can you organize and manage all these federal student loans? Student loan consolidation may be the answer.
However, once you consolidate, you can enroll in an income-driven repayment plan. Then, you can lower your student loan payment.
Enroll in automatic payments
Most lenders offer an interest rate discount when you enroll in automatic payments for your student loans. For example, if you connect your bank account to your student loan account, you could receive a 0.25% interest rate discount.
Apply for student loan forgiveness
There are many types of federal and state programs that offer student loan forgiveness and student loan assistance. For example, the Public Service Loan Forgiveness and Teacher Loan Forgiveness programs are federal student loan forgiveness programs that help public servants and teachers, respectively, pay off student loans faster. To qualify, you must satisfy certain requirements. There are also scholarships and grants that may help you lower your student loan payment.
Move to a new state
Many states offer student loan payment assistance if you move there. These incentives are available to residents who live for a certain period in the state. For example, Maine offers student loan assistance to student loan borrowers who live and work in Maine.
Ask your employer for help
Choose a longer student loan repayment term
The disadvantage to this strategy is that interest will still accrue on your student loans. Therefore, you may pay more total interest by the end of your student loan repayment term.
Increase your credit score
Having a good credit score can help you get a lower interest rate. A lower interest rate lowers your monthly payment because you owe less interest each month. If you have good credit, lenders will reward you with a lower interest rate.
If you have bad credit and do not have a co-signer, you should focus on improving your credit score. Your FICO credit score ranges from 350 (low end) to 850 (high end). Generally, a credit score of less than 550 is considered bad credit.
How do you increase your credit score? Credit score is determined by these major factors:
- Payment history (35%)
- Credit Utilization (30%)
- Length of credit history (15%)
- New credit (10%)
- Credit mix (10%)
Refinance student loans
Student loan refinance is the best way to lower your student loan payment. When you refinance student loans, you combine your existing federal student loans, private student loans or both into a new, single student loan with a lower interest rate. With a lower interest rate, you can lower your monthly payment compare to your current student loans.
If you feel refinancing student loans is right for you, you can compare lenders and check the latest student loan refinancing rates.
