Student loans are my largest debt. I’m not the only person that has them either. According to the Wall Street Journal the average class of 2015 graduate with student loan debt will have to pay back a little more than $35,000. That’s ridiculous. Most of us aren’t able to make a lump sum payment to pay our student loans off, so we’re looking for options. In today’s post, I want to share with you three different repayment options.
Income – Driven Repayment
The 1st student loan repayment option that I want to go over is the income-driven repayment. If your loan payments are high compared to your income, you may want to try one of the income-driven repayment plans. There are four plans that you can apply for, see this infographic/guide for more information. They are the revised pay as you earn repayment plan, pay as you earn repayment plan, income – based repayment plan, and income-contingent repayment plan. The plans are all a little different. You can get more in-depth info on them at Studentaid.ed.gov
Student Loan Refinancing
The 2nd student loan repayment option is to refinance your student loans. If your interest rates are high, you may want to find another company to refinance your student loans. Refinancing can help lower your interest rates thus reducing your monthly payments. That will allow you to save money and pay the loans off quicker. There are several companies to choose from, including SoFi, Citizens Bank, Earnest, LendKey, U-fi Student Loans, and DRB (see full list). Once you find one that you like, apply to them. If you’re approved, start making those payments and watch the extra money that you will save.
Federal Student Loan Consolidation
The final student loan repayment option is called federal student loan consolidation. Consolidation is when you take one loan and pay off the others. Once you do that, you will make a single monthly payment instead of multiple ones. Loan consolidation can lower your payments and also give you up to 30 years to repay your loan. Before you apply for loan consolidation make sure that it’s the smartest choice for you, see this infographic/guide for more information. If you extend your payments for too many years, you could pay more money than you originally had to.
Paying student loan debt isn’t the easiest. A lot of people struggle with large payments. At least, there are options like the income-driven repayment plan, student loan refinancing and student loan consolidation options. Make sure that you do your research and then choose the best one.