10 Ways to Lower Your Student Loan Payments

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Most of us have a love/hate relationship with our student loans. We love that they gave us the ability to go to college and pay for classes so we could have that degree that enables us to move on in our lives and begin working in successful career fields that pay us the big bucks (or not). We hate that we have to pay that money back, especially when it’s so ‘free’ feeling from the start. You get really used to receiving money with which to pay for classes and then suddenly you have it and it’s yours. And you don’t have to pay it back for a long time. You almost forget about this money not being free until you receive that first bill in the mail reminding you that you owe your first and second-born children to the government for helping you afford college. Student loans are helpful and expensive. Fortunately, we have a few suggestions that might help you to lower your payments so that you can afford them more accurately.

Ask

One of the simplest and best ways to lower your student loan payments is simply to ask. You have no idea until you try what your lender might allow from you. If you ask them to lower your payments so that you can afford them, they might actually listen and just do that. But you won’t know until you ask, so pick up the phone and make it happen.

Apply for Income-Based Assistance

There are programs out there that allow you to apply for income-based assistance in paying off your student loans. You can do this every year so that your income is considered when your repayment amount is factored. There is an income cap, which means that you will be able to pay very little amounts for a much longer time, but at least it’s more affordable at the moment.

Save $5 Bills

This is an interesting way to save money and make more student loan payments. Give yourself a cash system and leave your bank account alone. For example, if you use only cash to purchase things like groceries, gas and extras, you will always have $5 bills coming in. Each time you get one of these bills, go ahead and save it so that you can apply it to your loan payments. You might be surprised just how much it can save you.

Apply an Extra Payment

When you make two payments a month, you actually make an additional payment every year. We do not mean that you have to make two actual payments each month, but you should cut your payment in half and pay it every two weeks. This eliminates enough interest to allow you to pay the equivalent of an additional month’s payment each year, which will really cut down on your amount owed.

Use all Additional Monies to Make Additional Payments

If you get an income tax refund, apply it to your student loans. If you receive an inheritance of some sort, apply it to your student loans. You have the option to lower your payments by lowering the amount you owe, and you should always take that into consideration to make your life a little bit easier as far as your finances are concerned.

Work Outside the US

There are a number of programs in other countries that allow you to work free of tax up to a very high amount of money (some places as much as almost $100k per year) which means you don’t pay taxes on this money. When you aren’t paying taxes on this money, you are saving a lot. And you can use the money you would have sent to the government to lower your student loan payments.

Volunteer Your Time

There are some cities around the country that allow you to volunteer your time and skills in order to provide something for the community. When you do this, these places are willing to repay your student loans on your behalf. Find out when and where these programs are available to you so that you can see if they can help you pay off your debts and live a more financially secure future.

Ask About Forgiveness

You can have some sort of debt relief forgiveness in some instances. For example, there are some companies that will pay off your debts or forgive them if you are in a particular line of business or if you do something for them in return. This kind of forgiveness is totally legal and can help tremendously when you have bills to pay and a family to support outside of your student loan repayments.

Pay from the Start

Instead of allowing your student loans to accumulate without paying anything on them when you are in school, pay as much as you can from the start. For example, you might make the decision to pay just a little bit at a time while in school so that you can lower your payments when you graduate and have to begin paying them back on a regularly scheduled basis. This might involve using income tax returns to pay your balance or using money you are given from others, or that you earn at work. You can lower your payments this way before they ever even start.

Forbearance

This is something that should come as a last resort. Don’t forbear your payments unless you absolutely have to, but it is something that can help you when you need help the most. You will need to communicate with your lender and be completely open about the fact that you just can’t afford to repay your loans. You will need to tell them that you can’t do this, and they will likely give you the option to pay a much smaller payment by extending your terms. They want their money, and they’d rather work with you than allow you to default since they do want to be paid back for the funds they lent you in the first place.

Photo by David McNew/Getty Images

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Written by Tiffany Raiford

Tiffany Raiford is a lifelong Floridian, wife to my high school sweetheart and mother of four littles (two girls and boy/girl twins...no, they are not identical and yes, I'm sure). My kids love to whine, so I love to wine. My loves include nap time, bed time, date night, travel and evenings and weekends when my husband is home because he handles all diaper changes.