Folks, we’ve made it through another graduation season. The gowns and mortar boards are packed away, and now many graduates are focused on their finances during the first months out of college. Student loan repayment is just down the road.
As you look ahead to that first student loan payment, you may be realizing that it’s going to be a little tough to swing. You may have borrowed more than you can afford to repay or may not have secured employment quite yet. (Side note for those of you just starting to take out student loans: Make sure you budget properly so you don’t borrow more than you can repay.)
Whatever your situation, there are options available to help make it easier to pay your student loan. Here are some ways you may be able to lower your interest rate or monthly payments:
- Choose a different repayment plan. For federal loans, there are a number of repayment plans other than the standard repayment plan. You may be able to have your payment based on your income, extend your repayment if you have over $25,000 in federal loans, or start out with smaller payments that gradually get larger over the repayment term. And check with your lender to see what repayment options are available for your private student loans.
- Take advantage of discounts from you lender. Ask your lender if there are any interest rate discounts available for your loan. For example, you may be able to save money if you have your monthly student loan payment automatically deducted from your checking or savings account.
- Consolidate your loans. By combining your federal student loans together into a new loan with a longer repayment period, you’ll usually lower your monthly payment. For private student loan consolidation you may even find that your interest rate is lower if your credit situation has improved or if you bring on a cosigner with excellent credit.
Remember that if you’re lowering your monthly payment by extending your repayment period or paying just the interest, you may end up paying more interest over the life of your loan. However, in the grand scheme of things, if it prevents you from missing payments and defaulting on your student loan, it might be worth it.
Looking for a way to postpone your student loan payment? We’ll talk about deferments and forbearances later this week, so stay tuned!