Repayment plans for student loans are chosen or assigned as part of the approval process. Federal student loans are typically funded for large dollar amounts to match the costs of your college tuition. Private student loans are as well. Because of this, loan terms might range between ten and thirty years.
As your income, life and career all change, you might need your student loan repayment amounts to change with them. Methods to reduce monthly payments or pay as little interest as possible over the life of your loan exist. Read ahead about the many student loan repayment plans available for you today.
Federal and private student loan payments are possible to have restructured for qualified applicants. Private student loan repayment options might not be the same as those provided by federally backed lenders, however. Therefore, the first step involved when searching for options for student loan repayment plans is to understand the type of loan you have.
This might seem elementary but some people receive education-based funding from multiple sources. Once you determine if you are restructuring a federal or private student loan (or both), the next step is to consider all applicable options.
Several money-saving strategies apply to both federal and private loans. These proven strategies also apply to loans taken out for non-education-based purposes.
Four tried-and-true methods you might use to pay off your student loan(s) faster include:
- Restructuring your repayment plan through a lender.
- Refinancing the annual percentage rate (APR or interest rate) on your student loan through a lender.
- Reorganizing your budget to accommodate multiple monthly payments.
- Reorganizing your budget to accommodate payments above the minimum amount required.
The latter two strategies involve both personal discipline and an income level suitable to such changes. Making two payments instead of one is a valid strategy used to pay down interest faster. Paying above the minimum you owe each month is also an effective method of quickly paying off debt. For example, paying an additional $100 per month toward your student loan balance might reduce a ten-year term to five years (based on a 4.5% APR).
Still, you might not have the room in your budget to exercise this type of strategy. In this case refinancing your undergraduate or graduate student loan debt might be a viable option.
When you refinance a loan, your APR is typically lowered, which effectively also reduces your loan term. Loan refinancing is also a proven method of obtaining financial relief on your debts. Continue reading to learn more about the refinance options available for you and your student loan debt today.
