Let’s Reduce Your Student Loan Payments
Is your student loan debt keeping you up at night? Are you worried that you won’t make your payments? Are your payments keeping you from enjoying the life you hoped for in college? We’ve got three solutions to reduce student loan payments and get your life back.
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Reduce student loan payments starting now
According to a recent Student Loan Hero study, LGBTQ graduates have 17% more student loan debt, over $16,000 than the general population. In addition, more than 60% of us regret the amount of debt we’ve taken on to achieve our educational goals. On an upcoming Queer Money™ podcast, we discuss theories of why this might be the case – but hey – theories don’t make payments. Do they? You need real help and that’s what the Debt Free Guys™ are for; helping our LGBTQ brothers and sisters live fabulously, not fabulously broke.
3 solutions to reduce student loan payments
1. Refinance your private student loans
You probably don’t remember much about the student loan process because either your parents did it for you or a banker walked you through it without explanation. For these reasons, it’s likely that the interest rate you’re paying on your private loans was calculated at the highest rate possible to help the bank or lending institution make as much money as possible. We’ve recently seen students with rates as high as 10-12%. That’s almost as much as a credit card!
That high-interest rate is just pumping up your monthly payment, so let’s fix that. In the image below, you’ll see where on your payment statement you’ll find your current interest rate. If yours is above 6%, you need to refi fast.
LendEDU created this student loan refinancing calculator to help you calculate payments, potential savings, and weigh the decision.
Here are two companies we recommend to refi your private loan:
- Try SoFi – SoFi members save an average of over $400 a month on payments
- Contact Credible – Credible will find nine of the lowest rated offers for you
2. Request an income-based repayment plan
If you were lucky enough to qualify for federal student loans, then you have additional options to reduce your student loan payments. There are four types of repayment plans that are based on your income and family size. Yes, your family, even that buddy of yours who’s parked on your couch without a job finding himself, can impact your payments. Here are the four types.
- Revised Pay As You Earn Repayment Plan (REPAYE Plan)
- Pay As You Earn Repayment Plan (PAYE Plan)
- Income-Based Repayment Plan (IBR Plan)
- Income-Contingent Repayment Plan (ICR Plan)
The ins and outs of the plans and how they work, along with how to apply for them are discussed here.
One important item to keep in mind with changing to income-based repayments; you’re extending the term of your loan, which means you’ll pay more for your loan in the long-term than you originally agreed to, just with smaller monthly payments.
3. Request a deferment or forbearance
WTF? Right! Well, when you’re in a really tight squeeze, these are the two best ways to stop or reduce student loan payments for a minute. They’ll give you a breather, but BEWARE!
Both deferments and forbearance are ways to either completely stop or reduce the amount you’re required to pay. The primary difference being that with forbearance you are required to pay all the interest that accrues during forbearance.
Warning! Just as with income adjusted payments, forbearance and deferments mean your payment terms are longer, and this may mean you’ll end up paying more in the long run.
Student Loan Repayment Doesn’t Have to Suck Your Life Away
As I said, our queer community is struggling under a massive burden of student loan debt – even more than the general population. You don’t have to let it ruin your life. Click here now to get some reprieve from SoFi today! They’re awesome. Plus, when you become a member they’ll invite you to local meetups where they foot the bill for food and drinks. You ain’t getting that from your local bank or the FED.