Student loan debt is a huge problem in the United States. Student loans now make up over 1 trillion dollars of total U.S. consumer debt, and can be crippling for those who cannot afford to repay them on time or in full. The average student has $37,172 in student loan debt at graduation (that’s more than what they spent on their education!), and interest rates are adding hundreds of dollars each year to that amount. In this blog post we’ll discuss 3 easy ways you can lower your student loan interest rate!
Student loans can be an intimidating, confusing topic. While they are necessary for many students who need a low-interest loan to attend college or university, it is important to know how you can lower the interest rate on your student loan with ease! There are three easy ways to lower your student loan interest rate this moment right now: Have a co-signer, consolidate multiple loans into one consolidated loan, and apply for forbearance. With these three steps combined and some luck, you will see those high interest rates decrease by at least 1%! With these three simple steps and some luck from the universe (or good timing), you will see that your debt will become much more manageable.
Lower your interest rate by refinancing
Refinancing a student loan can lower your interest rate as much as 1.5% and save you hundreds of dollars each year. If you refinance your student loan, it’s important to make the right choice. When you refinance your student loans, you typically will not lose your federal benefits. If you take out subsidized federal loans, you’ll still have access to federal repayment, income-based repayment, and forgiveness programs. For your private loans, you will likely not receive any federal benefits. Some private lenders do offer income-based repayment and forgiveness programs. It’s important to do your research and find a private lender that offers these types of benefits.
Lower your interest rate by consolidating
The three easy ways you can lower your interest rate by refinancing, consolidating or consolidating a loan, or calling your current student loan servicer can be found below: Check Your Loan’s Qualifications One of the best ways to lower your interest rate is to have a quality student loan. Call your student loan servicer and inquire if your student loan is eligible for refinancing or consolidation. In some cases, student loans do not qualify for refinancing or consolidation, and therefore cannot be lowered. Before calling your servicer, it’s best to check with your own loan’s website to find out if it qualifies. Click here to check your student loan’s qualification status.
Lower your interest rate by applying for income-based repayment
If you’re getting student loans to finance your education, you should first consider the federal student loan interest rate (generally 10.5%). You have three options for this, depending on your income level: 1. Standard repayment – The federal government calculates your income, and you’re responsible for making payments up to a pre-determined limit of 15% of your modified adjusted gross income. This monthly amount is adjusted up or down based on income. (This also applies to private student loans.) 2. Income-Contingent repayment – If you have a “low” income and your payments are high, you can request a modification on your loan. If you qualify, your monthly payment amount is based on your modified adjusted gross income (MAAGI), or the standard repayment amount.
While it’s never easy to pay off student loan debt, making small changes can help bring your payments down and ultimately help you to achieve your goals. The more often you make your student loan payments on time and in full, the more quickly your interest rate will fall, and the sooner you can save thousands of dollars! Like This Post?