Do you have $ 100,000 in student debt? 5 ways to help pay
The forbearance provisions of the CARES Act for federal student loans have been extended until September 30, 2021. However, this stay does not extend to private student loans.
If you have private student loan debt, you may be wondering what your options are for managing it, especially if your balance is hovering around six digits. According to statistics collected by Credible, of the 43 million Americans who owe student loans, 2.8 million owe $ 100,000 or more.
The good news is that there are things you can do to help you pay off your student loans faster and save money.
If you have private student loans and are looking to ease the burden of student loans, you should consider refinancing. You can lock in some of the lowest interest rates ever seen through the Credible online marketplace.
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How to repay $ 100,000 in student debt?
Whether you have private or federal student loans, $ 100,000 is a daunting number to work with. So you will need a strategy to pay. With that in mind, here are five steps to tackle six-figure school loans:
- Consider refinancing private student loans
- Add a co-signer to get loan refinancing at lower rates
- Get help repaying your loan from your employer
- Prioritize student loan repayment by interest rate
- Weighing Federal Options for Managing School Loans
1. Consider refinancing private student loans
Refinancing student loans can make loans of $ 100,000 or more easier to manage if you are able to secure lower rates and lower payments. By saving money on interest, more of your monthly payments go into principal, so you can pay off debt faster.
If you are considering refinancing for private loans, you must first estimate the potential monthly payments using an online refinance calculator. Also check out Credible to compare student loan refinancing rates from several lenders without affecting your credit score.
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2. Add a co-signer to get loan refinancing at lower rates
Eligibility for the lowest private student loan refinance rates often depends on your credit history and credit score. Things like a high credit utilization rate or a high debt-to-income ratio could work against you.
Adding a co-signer to your loan application could help you appear more creditworthy. Just consider the implications of having someone co-sign so that you can refinance at a lower rate. If you default on payments, a default could cost you both credit points and potentially damage the relationship.
An online tool like Credible can be handy for comparing student loan refinance rates from several lenders without affecting your credit score.
3. Get help repaying your loan from your employer
Your employer may offer benefits to help you reduce your loan balance. For example, the CARES Act included a provision that allows employers to offer up to $ 5,250 in tax-free payments to employees for the repayment of a student loan.
Contacting your employer’s human resources department can help you determine what student loan assistance is available, if any.
4. Prioritize student loan repayment based on interest rate
If you have multiple school loans, you can use the debt avalanche method to pay off student loan debt. This method advocates paying off debts in the order of the highest interest rate to the lowest interest rate. It means saving money on interest.
If you want to reduce your loan balance faster, you can consider the debt snowball method. rather. This strategy involves paying off debts from the lowest to the highest balance, regardless of the interest rates.
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5. Weigh Federal Options for School Loan Management
If you have federal loans, consolidating them can be a good thing. While federal student loan consolidation doesn’t lower your interest rate, it can streamline your monthly payments.
Public service loan forgiveness may also be an option, depending on your career plans. This type of loan forgiveness requires you to enroll in one of the government’s income-tested repayment plans and make 120 qualifying payments.
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Should I refinance if I have federal loans?
Refinancing federal student loans can be tempting if interest rates are low, but it is generally not advisable. Indeed, this means giving up certain advantages, in particular:
- Provisions of the CARES Act
- Adjournment and abstention periods
- Grace periods
- Income-based repayment plans
- Forgiveness of government-funded loans
You might be better off consolidating instead of refinancing federal loans to keep those protections. Remember, you can still make payments on your loans even while the CARES Act is forbidden.
Check Your Private Student Loan Refinancing Rates
Now may be the time to consider refinancing private loans when rates are low. You can use an online tool like Credible to view a rate table that compares the rates of several lenders at once. It is also a good idea to use a refinance calculator to determine how much you could save when you have $ 100,000 or more in debt. Visiting an online market like Credible is an easy way to find out more about your loan refinance options.
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