5 Ways To Lower Your Student Loan Payments Due To Coronavirus
If the Coronavirus has seriously impacted your wallet, here’s how to get lower repayments on your student loans.
Here is what you need to know.
1. Join an income-based repayment plan
Income Based Repayment Plans are available to federal student loan borrowers and base your student loan payments on your discretionary income, family size, and state of residence. There are four main income-based repayment plans: Income-Based Repayment (IBR), Pay As You Earn (PAYE), Revised Pay As You Earn (REPAYE) and income-tested reimbursement (ICR). Even if your monthly payment is lower, interest is still accrued on your student loan balance. After 20-25 years, you can qualify for a student loan discount on the forgiven amount. However, you will have to pay taxes on the amount of student loan forgiveness you receive.
2. Choose the progressive repayment plan
While a standard repayment plan is for 10 years, you can choose a phased repayment plan for your federal student loans. With a gradual repayment plan, your monthly student loan payments increase over time. Rather than making a big monthly student loan payment, this plan increases your payment every two years and you will pay off your federal student loans in 10 years.
3. Choose an extended repayment plan
An extended repayment plan allows you to extend the repayment of your federal student loans from 10 to 25 years. To qualify, you must have Federal Direct or FFEL student loans with a balance of at least $ 30,000. As with income-oriented repayment plans, the longer you extend the student loan repayment, the more interest you may have to pay on the student loan.
4. Suspend your student loan payments
The CARES law, which is the new $ 2 trillion coronavirus stimulus law, allows you to suspend your federal student loan payments for six months until September 30, 2020. Previously, President Donald Trump also announced that you have the option to stop paying your federal student loans for 60 days. However, you don’t have to stop paying your federal student loans, but you do have the option. Also, interest on your federal student loans will be waived during the same period.
5. Refinance your student loans
Refinancing a student loan is the only strategy to permanently lower your interest rate and monthly payments. You can refinance federal student loans, private student loans, or both. Even if you’ve refinanced before, there are no fees and no limit to the number of times you can refinance. Student loan refinancing rates have fallen due to the Federal Reserve’s interest rate cut.
This student loan refinance calculator shows you how much you can save when you refinance student loans.