Americans are carrying a lot of student debt. In 2016, the average college graduate owed $37,172 in student loans. Because of this, it’s important to learn how to reduce your monthly payments.
How to Reduce Your Monthly Payments
In order to reduce your monthly payment, you’ll need to consolidate your loans. Consolidation allows you to combine multiple loans into one new loan that can be paid off faster and with a lower monthly payment.
With the recent changes in the US student loan system, many people are looking for ways to reduce their monthly payments. This can be achieved by opting for a loan consolidation that allows you to lower your monthly payments by up to 50%. There are many other options available for people looking to lower their payments such as deferment, forbearance and income-based repayment.
What if My Loan is Converted to an Income-Based Repayment Plan
As of July 1st, 2018, the U.S. Department of Education was able to convert student loans from federal unsubsidized loans to federal direct student loans. This meant that a borrower with an unsubsidized loan could no longer defer interest and only had a grace period for repayment before their loan would become due. For borrowers who had been waiting for this opportunity, the changes brought more time in which they could consolidate their debt before being subject to the old rules.
If your loan is deemed eligible for an income-based repayment plan, that means that you and your lender have mutually agreed to switch your loan repayment program to a new one. This is a great deal for the borrower, because it allows them to pay back their loan over a shorter period of time. However, there are some drawbacks of these programs. For example, changes in interest rates mean that the borrower’s monthly payment could increase or decrease depending on the market rate.
US Student Loan Consolidation and Payment Reduction for Forgiveness
To put it simply, a US student loan consolidation and payment reduction is when you pay off your existing loans in exchange for a lower monthly payment. It’s also possible to forgo making payments for six months or longer, as long as you make on time payments after that. But if you’re considering this option, keep in mind that there are caveats: There’s no guarantee of what interest rates will be in the future.
US Student Loan Consolidation and Payment Reduction for Forgiveness offer forgiveness for borrowers who have consolidated their student loan debt into one plan. However, if you don’t qualify for the US Student Loan Consolidation and Payment Reduction Forgiveness, you can also still get a lower payment by applying to have your monthly payment amount lowered.
With the current state of the economy, many students are struggling to make ends meet. Student loan debt is growing rapidly and, in some cases, can be crippling. However, there are options to help reduce your student loan debt and get it out of your name quickly.
After finding out all the information I needed, I was able to successfully find a consolidation plan that would work for me. We discussed the pros and cons of each company, which helped me make my decision.