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How to Lower Your Student Loan Payments

Updated on April 10, 2024

At a Glance

  • To lower student loan payments, consider several strategies:
  • Apply for an income-driven repayment plan that adjusts based on your earnings and family size.
  • Consider a graduated repayment plan with payments that incrementally increase or an extended plan to stretch out the loan term. Consolidation can combine loans for simpler payments, potentially with a reduced interest rate. Some states offer repayment assistance, and certain employers also provide help. Automatic payments might fetch discounts, and refinancing can potentially lower interest rates. Lastly, explore specialized repayment assistance programs for certain professions or public service roles.

If you’re drowning in student loan debt, you’re not alone. By 2021/2022, 94.7 billion U.S. dollars in loans was offered to students in all states. Still, as necessary as they may be when you take them, these loans can put a lot of financial burden on you, making it harder to live a stress-free life.

But fear not! In this guide, we’ll explore some ways to help you lower your student loan payments and regain control of your financial life.

How to Lower Student Loan Payments

Your student loan payments can put you in a very tough financial spot. You may be struggling to make payments and live a comfortable life at the same time. Luckily, there are a few ways you can lower your student loan payments. Here is what you can do:

1. Apply for an Income-Driven Repayment Plan

One option to consider is applying for an income-driven repayment plan. These plans calculate your monthly payment based on your income and family size. The best part is that if you stick with the plan for 20 or 25 years (depending on the plan), then any remaining balance will be forgiven.

Imagine the relief of knowing that your student loan payments are directly tied to your income. This means that as your income grows, your monthly payments will increase accordingly. It’s a flexible and manageable method to tackle your student loan debt without feeling overwhelmed.

Additionally, income-driven repayment plans take into account your family size. So, if you have dependents or are planning to start a family, this can further reduce your monthly payments. It’s a win-win situation that allows you to focus on building a stable financial future.

2. Sign Up for a Graduated Repayment Plan

Another way to lower your student loan payments is by signing up for a graduated repayment plan. These plans start with lower payments in the beginning and gradually increase over time. So, if your income is expected to rise in the future, then this could be a smart move to ease the burden now.

Think of it as a stepping stone towards financial freedom. With a graduated repayment plan, you have the opportunity to start small and gradually increase your payments as your income grows. It’s a strategic approach that allows you to manage your student loan debt while having room to breathe.

By taking advantage of a graduated repayment plan, you can focus on establishing your career and building a solid financial foundation. As your income increases, you’ll be better equipped to handle higher monthly payments, ultimately paying off your student loans sooner than you may have thought possible.

3. Consider an Extended Repayment Plan

If you’re looking for some long-term relief, an extended repayment plan might be right up your alley. With this plan, you can stretch the repayment period from the standard 10 years to up to 25 years. Keep in mind that this will lower your monthly payments, but you’ll end up paying more in interest overall.

Extended repayment plans offer a sense of flexibility and breathing room. By extending the repayment period, you can reduce the immediate financial strain and allocate your resources towards other important aspects of your life, such as saving for a home or starting a family.

However, it’s important to carefully consider the long-term implications of an extended repayment plan. While it may provide temporary relief, you’ll end up paying more in interest over the extended period. It’s crucial to weigh the pros and cons and determine if the lower monthly payments are worth the additional interest in the long run.

4. Consolidate Your Loans

Loan consolidation is like hitting two birds with one stone – it simplifies your life and reduces your monthly payments. By combining all your loans into one, you can often score a lower interest rate and extend the repayment period. Just be careful to do your research and consider the pros and cons before diving in.

Imagine the convenience of having just one monthly payment instead of juggling multiple loan payments. Loan consolidation streamlines the repayment process, making it easier to manage your finances and stay on top of your student loan debt.

Furthermore, consolidating your loans can often lead to a lower interest rate. This means that you’ll be paying less in interest over the life of your loan, ultimately saving you money. It’s a smart financial move that can provide both short-term relief and long-term savings.

5. Move to Another State

This one might sound a bit over the top, but some states offer student loan repayment assistance programs to attract professionals in high-demand fields. So, if you’re willing to pack your bags and start a new adventure, you might just find yourself with lower loan payments and a chance to explore a new city.

Imagine the excitement of embarking on a new chapter of your life while receiving financial assistance with your student loan debt. Some states recognize the importance of attracting talented individuals and offer incentives to help alleviate the burden of student loans.

By moving to a state that offers student loan repayment assistance programs, you can take advantage of this unique opportunity. Not only will you benefit from lower loan payments, but you’ll also have the chance to immerse yourself in a new environment and expand your professional network.

6. Enroll in Automatic Payments

Let’s face it, life gets busy and sometimes you forget to pay your bills on time. But did you know that some lenders offer a little discount if you sign up for automatic payments? It’s like having your student loan payment deducted from your bank account every month, while saving a few bucks in the process. 

Enrolling in automatic payments is a simple yet effective way to ensure that your student loan installments are always made on time. By setting up automatic deductions from your bank account, you eliminate the risk of forgetting to make a payment and incurring late fees.

Not only does this provide peace of mind, but many lenders also offer a small discount as an incentive for enrolling in automatic payments. It’s a small reward for your responsible financial behavior and can add up to significant savings over time.

7. Get Help From Your Employer

Some employers are actually willing to help you tackle that student loan debt. It doesn’t hurt to inquire if your company offers any student loan repayment assistance programs. You might just find yourself with a little extra cash flowing in and a brighter financial future.

Imagine the relief of knowing that your employer is invested in your financial well-being. Some companies recognize the burden of student loan debt and offer assistance programs to help their employees.

By taking advantage of your employer’s student loan repayment assistance program, you can receive additional funds toward your student loan payments. This can significantly reduce your monthly payments and accelerate your journey toward becoming debt-free.

8. Refinance Your Student Loans

If you have good credit and a steady income, refinancing your student loans could be a game-changer. By refinancing, you can get a lower interest rate and potentially lower your monthly payments. Just make sure to weigh the pros and cons, and read the fine print before making any life-altering decisions.

Refinancing your student loans offers the opportunity to secure a lower interest rate, which can result in substantial savings over the life of your loan. By reducing your interest rate, you’ll be able to lower your monthly payments and allocate those savings towards other financial goals.

However, it’s important to carefully consider the terms and conditions of refinancing. Make sure to compare offers from different lenders, understand any fees involved, and assess the impact on your overall financial situation. Refinancing can be a powerful tool, but it’s crucial to make an informed decision that aligns with your long-term financial goals.

9. Search for Repayment Assistance

The world is full of hidden gems, and one of them might be repayment assistance programs. Some organizations offer financial assistance to individuals who meet certain criteria, such as working in public service or a specific field.

Repayment assistance programs can provide a lifeline for individuals struggling with student loan debt. These programs are often targeted towards specific professions or industries that are deemed to be of public importance.

By exploring repayment assistance programs, you may uncover unique opportunities to receive financial support toward your student loan payments. These programs can significantly reduce your monthly payments or even provide loan forgiveness, allowing you to focus on your career and make a positive impact in your chosen field.

Refinancing As a Way to Lower Your Student Loan Payments

As the weight of student loans looms over many graduates, the quest for more manageable repayment solutions becomes imperative. Refinancing to get a lower monthly payment can offer the breathing room needed to navigate life after college. Fortunately, several lenders specialize in refinancing options designed to make student loan repayment less burdensome. Here’s a snapshot of some standout options for those looking to ease their monthly financial commitments.

AmOne (Best for Okay to Good Credit)

For borrowers with okay to good credit seeking to lighten their monthly financial load, AmOne stands out as a reliable choice. Operating as a connection point between borrowers and a multitude of lenders, AmOne facilitates the hunt for optimal refinancing deals. Their expansive network allows those with moderate credit ratings to find solutions that could significantly reduce their monthly student loan payments.

AmOne Personal Loan

4.5
Stilt’s lender ratings reflect the findings and opinions of our editorial staff. Our scoring methodologies consider a wide array of factors and data points for every lender, offering, and financial solution.
Min. credit score

600

Fixed APR

3.99%-35.99%

Variable APR

N/A

Overview

  • Minimum credit score: 600.
  • Fixed APR: 3.99%-35.99%.
  • Loan amounts: $1,000 to $50,000.
  • Repayment: 1 to 7 years.

Qualifications

  • Must be at least 18 years old.
  • Must be a U.S. citizen or permanent resident.
  • While there’s no specific income requirement, a consistent source of income is essential for the applicant.

Pros

  • Suitable for individuals with lower credit scores.
  • No cost for the matching service.
  • Attractive loan rates.

Cons

  • Acts as an intermediary, not a direct lender.
  • Risk of multiple contacts from prospective lenders.
  • Lack of clarity on lender details.

Spring Loans (Best for Bad Credit and No Credit)

Navigating the refinancing terrain with little to no credit history, or past credit challenges, might seem daunting. Enter Spring Loans, a lender that understands that past financial hiccups shouldn’t define one’s future. By valuing broader financial indicators over just credit scores, Spring Loans offers refinancing options that cater to the unique needs of those struggling with high monthly student loan payments.

Spring Loans Personal Loan

4.2
Stilt’s lender ratings reflect the findings and opinions of our editorial staff. Our scoring methodologies consider a wide array of factors and data points for every lender, offering, and financial solution.
Min. credit score

None

Fixed APR

27.00%

Variable APR

N/A

Overview

  • Minimum credit score: None.
  • Fixed APR: 27.00%
  • Loan amounts: $3,000.
  • Repayment: 48 months.

Qualifications

  • Demonstrate a recurrent income.
  • Minimum age prerequisite: 18 years.
  • Validate U.S. citizenship status with an SSN.
  • Provide a legitimate U.S. driver’s license or a state identity card.
  • Establish a functional bank account for incoming deposits.
  • Adhere to any specific demands by the loan provider.

Pros

  • Open to applicants with any credit background.
  • Four-year loan period aids in structured financial management.
  • The $3,000 offer addresses several short-term financial challenges.
  • Wide-reaching eligibility criteria invite a broad spectrum of applicants.
  • The focus on dependable income over job title benefits varied income sources.

Cons

  • The set 27% APR is higher than many alternatives.
  • Restriction to a $3,000 loan might not cover all financial outlays.
  • Possessing specific IDs is mandatory, sidelining some applicants.
  • A prerequisite for an ongoing bank account may limit certain users.

First Premier Lending (Best for Bad Credit)

First Premier Lending specializes in assisting borrowers with less-than-stellar credit histories. Recognizing that everyone deserves a second chance, they adopt a holistic approach to understand a borrower’s complete financial situation. Their personalized refinancing solutions provide an avenue for individuals with bad credit to secure more favorable loan terms, ultimately translating to lowered monthly payments.

First Premier Lending Personal Loan

4.2
Stilt’s lender ratings reflect the findings and opinions of our editorial staff. Our scoring methodologies consider a wide array of factors and data points for every lender, offering, and financial solution.
Min. credit score

None

Fixed APR

27.00%

Variable APR

N/A

Overview

  • Minimum credit score: None.
  • Fixed APR: 27.00%.
  • Loan amounts: $3,000.
  • Repayment: 48 months.

Qualifications

  • Maintain a consistent source of income.
  • Must be at least 18 years of age.
  • Possess valid U.S. citizenship and a legitimate social security number.
  • Hold a current U.S. driver’s license or state-issued ID.
  • Keep an active bank account for direct deposit.
  • Satisfy any lender-specific criteria, such as credit rating, borrowing history, or place of residence.

Pros

  • No minimum credit score requirement allows accessibility for those with varied credit histories.
  • 48-month term provides clarity and allows for long-term financial planning.
  • Specific loan amount of $3,000 can meet many short-term financial needs.
  • Broad set of qualifications make the loan accessible to a wide range of people.
  • Emphasis on consistent income, not necessarily employment type, allows flexibility for borrowers.

Cons

  • A fixed APR of 27% is relatively high.
  • Loan amount is capped at $3,000, which might not cater to larger financial requirements.
  • Requirement of a U.S. driver’s license or state-issued ID could exclude some individuals.
  • Mandatory active bank account could be limiting for those who are unbanked.

Upgrade (Best for Good to Great Credit)

Boasting a reputation for excellence, Upgrade caters predominantly to those with commendable credit histories. Their offerings stand out in terms of competitive rates and flexibility, making them a go-to choice for those seeking to refinance and reduce their monthly student loan commitments. Their transparent processes and terms ensure that borrowers are well-informed and secure in their refinancing decisions.

Upgrade Personal Loan

5.0
Stilt’s lender ratings reflect the findings and opinions of our editorial staff. Our scoring methodologies consider a wide array of factors and data points for every lender, offering, and financial solution.
Min. credit score

560

Fixed APR

8.49% - 35.99%

Variable APR

N/A

Overview

  • Minimum credit score: 560
  • Fixed APR: 8.49% – 35.99%
  • Loan amounts: $1,000 to $50,000
  • Repayment: 3 to 5 years (7 years on some larger loans)

Qualifications

  • Possess an active bank account.
  • Able to provide a legitimate email address.
  • Minimum age requirement: 18 years (19 for Alabama residents).
  • Credit score of 600 or higher.
  • Annual income of $25,000 or more.

Pros

  • Willing to accommodate borrowers with a credit score as low as 560.
  • Offers flexibility with a range of loan amounts from $1,000 to $50,000. This can be suitable for both small and large financial needs.
  • Provides options for repayment, allowing borrowers to choose a timeline that best suits their financial situation.
  • Once approved, borrowers can access funds in just one day, which is useful for urgent financial needs.

Cons

  • Origination fees can go as high as 9.99%, which might add a significant cost to the loan.
  • Apart from the origination fee, there are fees for late payments and failed payments, which can add up if one is not careful.
  • While there is an option to extend repayment for larger loans up to 7 years, it’s not standard for all loan amounts.

BestEgg (Best for Good Credit)

BestEgg, with its strong foothold in the personal loan sector, presents tailored refinancing solutions for individuals with good credit. Their straightforward application process combined with competitive rates ensures that borrowers can confidently transition to more manageable monthly payments. For those keen on streamlining their student loan repayments without compromising on terms, BestEgg emerges as a top contender.

BestEgg Personal Loan

4.5
Stilt’s lender ratings reflect the findings and opinions of our editorial staff. Our scoring methodologies consider a wide array of factors and data points for every lender, offering, and financial solution.
Min. credit score

600

Fixed APR

8.99-35.99%

Variable APR

N/A

Overview

  • Minimum credit score: 600.
  • Fixed APR: 8.99-35.99%.
  • Loan amounts: $2,000-$50,000.
  • Repayment: 3 to 5 years.

Qualifications

  • Targets borrowers with good to excellent credit; fair credit may qualify.
  • Minimum credit score of 600.
  • At least two years of credit history.
  • Minimum annual income: $3,500 from various sources like employment, alimony, and more.
  • Debt-to-income ratio: 40%, or 65% when including a mortgage.
  • Must be a U.S. citizen.

Pros

  • Soft credit check available for pre-qualification.
  • Offers a diverse spectrum of loan amounts.
  • Provides options for secured loans.
  • Direct payments can be made to creditors for debt consolidation.
  • Late fees are not charged.

Cons

  • Charges an origination fee.
  • Doesn’t offer rate discounts.
  • Initial payment date isn’t customizable.
  • Lacks a dedicated mobile app for loan management.

Choosing The Best Student Loan Payment Plans

Now that you know about all these options, it’s time to choose the best student loan payment plan for you. Remember, everyone’s situation is unique, so what works for someone else may not work for you. Take your time, crunch the numbers, and consider your long-term goals in order to make the right choice.

Final Thoughts

Lowering your student loan payments may seem like a daunting task, but with some clever strategies and a touch of determination, you can make it happen. Explore the options that best align with your financial goals and take steps toward a brighter, debt-free future. It’s also good to understand how paying off your student loans will impact your credit score and other aspects of financial health. Be patient and keep hustling and you’ll get there eventually. And for additional guidance, check out our guide 5 Ways to Low Student Loan Payments!

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Frank Gogol

I’m a firm believer that information is the key to financial freedom. On the Stilt Blog, I write about the complex topics — like finance, immigration, and technology — to help immigrants make the most of their lives in the U.S. Our content and brand have been featured in Forbes, TechCrunch, VentureBeat, and more.

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