Interest compounding on your student loans adds up quickly. For many people, paying even the accumulating interest may be more than they can handle. Try these strategies to get a handle on your student loan payments and avoid default.
Request New Payment Terms
There are plenty of payment options for student loan borrowers. You will need to reach out to your student loan servicer about qualifying for each of these programs.
Deferment can be used when you are enrolled in school, unemployed, facing certain medical or economic hardships, or deployed in military operations. This postposes payment and suspends interest on subsidized loans.
Forbearance also temporarily delays repayment of your loans, but interest will continue to be added. This is an option if you are unable to make payments and want to avoid delinquincy.
Income-driven repayment plans consider your present and expected income to determine a payment that you can truly afford. This can be a good way to gradually start paying on loans while you build a career.
Refinance Them
Refinancing your separate loans into a single, simple-interest loan can make a lot of sense if you want to pay it off quickly and you can afford a substantial payment each month. When doing this you give up the payment options described earlier, but you will also restructure your loan into what is likely a less expensive option in the long term.
Look for a lender who will offer assistance beyond servicing your loan. Simple Path Financial is among a number of companies that offer career services to people refinancing student loans through them.
Set Up Automatic Payments
Pick the biggest amount you can realistically pay each month and set up automatic payments to your loan servicer. This will let you get ahead of interest and start making a dent in the principal balance of your loan.
Don’t let the burden of student loans weigh you down. Take steps to keep current on your payments, and make every effort to pay them off as soon as possible.
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