4 Steps to Shedding That Student Loan Debt

ByTop10.com StaffNov. 16, 2020

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College Graduate with Their Debt
Getting a student loan for college is easy, but paying it off is the hard part. Lenders are all too ready to hand out funding for college costs that are climbing higher and higher. Learn how to reduce your student loan payments for good.

Many students are left with no choice but to take out loans to get a college education with the hopes of finding a high paying job after graduating. The reality is the job market has been rough and college costs keep rising as wages stay the same. Luckily, there are ways to shed the weight of student debt that has been holding you down, such as with a top student loan refinancing program

Step 1 – Create a Budget and Savings Plan

When paying down debt it is important to know where your money is going. While it may seem tedious and annoying, creating a budget so that you know exactly what you are spending your money on is very advantageous. You will be shocked to see how small expenses throughout the month can really add up. Once you have all of your expenses written down, you can see that if you skip going out for coffee every day, buy household items in bulk, and wait for items to be on sale, you can seemingly find extra money out of thin air.

Step 2 – Research Available Options

You may not have to pay that entire massive student loan that is looming over you. There are a few things you can do to help you cut total loan payments, helping you fit your monthly budget better - mainly to consolidate or refinance your student loans at a lower interest rate to help lower your monthly payment or pay down your loan faster

Our Top 3 Student Loan Refinance Options


Credible
Rates from:
2.25% (with autopay)* 
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Read Review

Splash Financial
Rates from:
 
1.89%
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Figure
Rates from:
3.490% (with autopay)
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Step 3 – Analyze Debt Relief Options

Since you have planned out a budget and understand your options, you can now decide which path is right for your situation. If you have a good credit score, consolidating your loan is a good option. There are several companies that will issue new loans for your student debt at lower rates.  Unlike traditional lenders, many online lenders use education and career trajectory to measure a customer’s repayment likelihood. By looking at your financial future and not just your past, these companies can issue loans at rates that let you save thousands of dollars on your total student debt payment. Many companies also provide loan terms up to 20 years, which can also decrease your monthly payment.

"Contact your loan servicer about your private student loans and ask about what kind of repayment special provisions might be available, whether that’s deferment, forbearance, or a different repayment stream. The answer may be “no”, but it doesn’t hurt to ask. Those are the things that I do recommend to people who are struggling with their student loan repayment."

-Kevin Walker - CEO and Founder at Collegefinance.com

For people with student loans and bad credit, debt settlement may be a good option. Customers pay an affordable amount into a savings program that a debt settlement company will use as leverage to negotiate a settlement of up to 70%. While that sounds great, there are some long-term consequences. While you pay into your savings plan, you will not be making loan payments, which impacts your credit score. Also, the debt settlement company will charge a percentage of the money they save you and that money you save is considered taxable income. However, if you cannot get a better interest rate on your student loans, this is definitely an option to explore.

Top Student Loan Refinance Options

Credible

  • Compare different loan options
  • No fees

In addition to being a leading option for personal loans, Credible offers competitive rates for student loan refinancing as well. It is a loan marketplace working with well-known loan providers in the industry. With a modern approach to student loans and outstanding customer service, Credible is an ideal solution for those who want to weigh their options.

Read the full Credible review >>

Credible Credible Visit Credible

Splash Financial

  • No application fees
  • No prepayment penalties

Splash Financial is a rookie player making home runs with student loan refinancing. It offers low rates, an easy to navigate website, flexible repayment schedules and special rates for medical residents.

Read the full Splash Financial review >>

Splash Financial Splash Financial Visit Splash Financial

Step 4 – Execute a Debt Relief Strategy

After you have explored your options, consider a new payment that will fit your long-term budget constraints. You can only lower your debt by not spending more money than you make. Transferring debt from student loans to credit cards is not a good long-term solution. You must make sure that your new student loan payment or debt settlement payment is an amount you are comfortable spending for the foreseeable future. If it is not, go back and see how you can cut your spending. If you cannot, consult meeting with a professional debt consultant, many of whom are free at non-profit organizations.


If you'd like to refinance your student loan, check out these top providers Need more help? Feel free to check out the rest of our articles and reviews