Sunday, January 29, 2023

How To Lower Your Student Loan Payment: 5 Legal Ways To Save Money

What you should know about your student loans

Your student loans aren’t going away any time soon and neither are the headaches that come with defaulting on your student loans or not paying the payments on time. Fortunately, you have a number of legal options available to you in order to avoid going into default and collect the amount of money you owe, and the good news is that the options for paying them off are becoming increasingly more affordable and accessible.

Ways To Lower Your Student Loans Payment

A lot of students are looking to free up some more money in their bank accounts and take some pressure off their already tightening budgets. And that means refinancing and finding a new repayment plan.

For years, the average federal student loan repayment (the default plan) was 10 percent of your monthly income. Starting in 2015, the Obama administration issued two new repayment plans to Americans—the Income-Contingent Repayment (ICR) plan and the Pay As You Earn (PAYE) plan.

These two plans are expected to save the federal government a lot of money in the long run because they’ll require borrowers to pay less over the course of their lives. Unfortunately, many people are not aware of the changes and have been fighting to save money.

Student Loan Repayment Plans

There are a lot of Student Loan repayment plans that you can choose from. But sometimes that kind of choice can make things a bit complicated. And before you decide to take a job, it might be a good idea to find out how much your student loan payment would be and see if you can lower it.

Take a look at a few of the options below:

Auto Pay Plan

There are a lot of people who opt for an automatic plan. And some of them actually pay less than they originally owed because of it.

You can still make some choices. For example, you can choose to pay extra each month to a student loan plan.

Income-Based Repayment Plan

If you are just getting started, this might be the best plan for you. And here’s why: You are more likely to stay in school if you have to pay less each month.

Refinancing Your Student Loan

Allowing you to have your loan paid off early, usually as a one-time lump sum, and receiving a new, lower interest rate. Some lenders offer balance transfer loans, which allows you to take your current loan and immediately start paying it off over an extended period of time.

You can also look into income-driven repayment plans. These allow you to make payments based on your income and family size. Depending on your loan, you may be able to put your payment as a fixed percentage of your take-home pay or the number of people in your home.

Financing A Career

If you plan on pursuing a career in law, medicine, engineering or medicine, refinancing is your best bet.

Suggested Resources

If you want to reduce your monthly payments through refinancing your student loans, you’ll need to know how to reduce your monthly payments. Here are some resources to help you lower your student loan payments.

Bankrate has a free website called Cheapest Taxes.

Discover has tools that help you compare different types of loans, among other things.

Quicken has a tool called Easy Ways To Help Your Pay Your Student Loans.

Calculatorzip has tools and calculators to help you determine your student loan payments.

College Swagbucks has a calculator tool for you to input your various student loan debt amounts.

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