Student loan debt is something many Americans have to deal with. It is currently the second-highest consumer debt category. We are going to share ways to lower your student loan debt and make it less of a burden on your finances.
Get Organized
When it comes to dealing with any kind of debt, you need to make sure you are organized and know what types of loans you have. There are both private and federal student loans, each with their own options for repayment or consolidation. You may also have a combination of both types of loans. It’s important to note what exactly you have as they can have different features and benefits. You also need to know the total amount you owe. When deciding how much to pay each month, ensure the payment amount is sustainable in the long run. Also, look into all the repayment plans that are available to you.
Talk to Your Lender
Managing your student loan interest can also be helpful long term. With your lender, negotiate your interest rate or change your payment amount. You can also consolidate federal student loans to help you qualify for programs or loan forgiveness. Consolidation, additionally, can lengthen your payoff period, which will give you more time to pay it off. However, this adds more interest payments, so take that into consideration when considering this option.
Pay More (When You Can)
It is also smart to pay extra whenever you can, as the faster you reduce your total amount due, the less interest you will pay overall. Saving for retirement can also be helpful as contributing to your 401(k) or an IRA lowers your Adjusted Gross Income. By doing this you will lower monthly student loan forgiveness and increase the amount forgiven all while helping you build your retirement savings.
Refinance
Refinancing your student loans is another option, allowing you to leverage good credit and a steady income for a lower interest rate. This eliminates old loans with higher interest rates and creates a new one with lower interest rates and a new lender. This means there are also situations where this may not be the best option. If you have a federal loan and utilize an income-driven repayment plan or loan forgiveness program, it's important to note the federal government is the only lender that offers these. So, in that case, it may not be wise to refinance those loans. Not all your loans need to be refinanced, and it is recommended that you don’t include existing low-interest loans.
If you are looking for help dealing with your student loan debt or setting up your financial plan, come talk to the experts at PR Wealth.
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