Here are five tactics to lower your private student loan payments and make them more manageable:
1. Bargain for better loan terms
Surprisingly, you might be able to negotiate better loan terms with your lender. You could ask for a lower interest rate, a longer term, or a temporary reduction in your monthly payment. Remember, it never hurts to ask – the worst they can say is no.
2. Employer-based repayment assistance programs
Some companies offer student loan repayment assistance as an employee benefit. If you’re fortunate enough to work for one of these companies, make the most of this perk! These programs usually involve your employer making monthly payments towards your student loans, helping you pay them off faster.
3. Loan discounts, incentives, or temporary relief options
Some lenders offer discounts or incentives for actions like setting up automatic payments or making a certain number of on-time payments. Also, you could explore temporary relief options like deferment or forbearance, which we discussed earlier.
Related: What Increases Your Total Student Loan Balance?
4. Smart ways to tackle private student loans
When you’re ready to make payments, focus on paying off loans with the highest interest rates first. This will lower the total interest you pay and save you money in the long run.
Also, consider making extra payments toward your principal balance when possible.
Finally, if you have a variable-rate loan, look to refinance to move to a loan with a lower fixed interest rate. Inflation has raised rates in the past year and has caused borrowers’ monthly payments to increase and to cover the extra student loan interest being added to their balance every day.
5. Private student loan forgiveness alternatives
While federal loans boast forgiveness programs like Public Service Loan Forgiveness, private student loans typically lack similar options.
Private student loan forgiveness is hardly a thing.
But you can make your private loan debt more manageable by budgeting, using financial planning resources, and exploring state or career-based repayment assistance programs.
Remember, keeping an open line of communication with your lender is crucial.
They might have other options available to help you manage your private student loan debt.