Options to meet out Student Loan
The rising tuition cost in the various universities lead students and their parents to the path of lending a “student loan”. Sometimes these loans are much higher than the capacity of a student to pay back; they may also have a high interest rate.
They borrow the loan at a time when they need to pay the university or college urgently. After a certain point of time they realize that the loan amount and the interest rate is higher than many other lenders. This is the time when they think of switching over to some other lender who can give a lower interest rate.
The interest rate on federal student loan is fixed; however, the private student loans have variable interest rates.
Possibilities of refinancing
- Your promissory note locks in the terms on your loan.
- There is rarely a possibility to get your student loan refinanced.
- You have the option of lowering your monthly payment.
- You also have the option of reducing the amount you are expected to pay over your life.
- You have the option of consolidating your student loan by reducing your current monthly repayment and increasing the period for which you have to pay the loan.
- This means you are getting a little relief at the moment but in future you might find it painful to continue paying for a longer period.
- In a private student loan, you can get your interest rate consolidated sometime later.
- The consolidation again depends upon your credit score, which if improved with time will give you a good benefit and you interest rate will be lowered.
Other options of repayment
- If refinancing seems to be a remote possibility then you can also think of clearing your debt by taking a personal loan or any other kind of loan. Before doing so you must surely compare the interest rates. If you think it is more gainful to take a personal loan and clear off the debt than continue paying student loan then you can choose this option.
- You can also pay more of principal amount every month so that you have to pay less of interest rate on the remaining Principal amount.
- If you’re working as a public servant then you may expect a small amount of your loan amount to be deducted.
Hence, a student loan need not be nightmarish as there are options galore to reduce the burden if not a way to get rid of it.