to be graduating college this year, and I realize that I have a lot more
student loan debt than I ever imagined. My loans are now over $30,000, and they
may hit near $40,000 during my last semester. I know that the career I chose
will be worthwhile, but $40,000 is a lot of debt to start out my life.
my options when repaying my student loans?
any options to keep payments low and affordable?
loans in the United States have reached over $1.5 trillion, with more than 40 million Americans
repaying loans. You’re not alone in your fear that student loans will be a
major burden on your future. Younger generations are stalling on buying homes
or even getting married because they’re afraid of the massive amount of debt
that they already have.
A lot of
students recommend working with a student loan service provider which is
responsible for making sure all of your loans are paid on time. Great Lakes loans are a good example, and they will
allow you to manage all of your private and federal loans in one portal.
never have to jump from one portal to the next to locate your loan.
has everything right out in the open for you, and there are apps that can help
you further manage your loan properly.
just how to manage the loans and doesn’t really do much to lower your loans.
You do have the option, if you can, of paying the full amount on your loan
payments each month. You simply send the company payment every month just like
you would with any other form of debt.
options to lower your payments are:
You can consolidate all of your loans, and this means making one payment
to one company per month. The problem is that you will be assessed a fee, so
you need to make sure that this fee is worth consolidating.
let’s assume a private loan has a 10% interest rate. You may want to
consolidate to a loan with 6% interest, but there may be a 4% charge for
to crunch the numbers over the course of the loan to be able to judge whether
consolidation is the right path or not for you.
also government options which you can enter. IBR, REPAYE, PAYE and other
programs that will look at your discretionary income and decide your payment
based on this amount. The programs will require a payment of 10% to 20% of this
income, and then the loans will normally be forgiven within 20 to 25 years.
a major catch here.
enter into these programs, your payments will do very little to lower your
balances. I know someone very close to me that has been paying their loans for
years on these programs, and the balances today are higher than they were at
the start. The payment doesn’t even cover the interest, so this should be a
short-term solution to a major debt rather than a 20-25-year sacrifice.