The Ultimate Guide to Lowering Your Student Loan Payments

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“This is almost as much as my rent.”

“I could go on vacation every month with this kind of money.”

These are probably just a couple of the thoughts that have run through your mind as you make your monthly student loan payment. If only there were some way to lower your student loan payments to a more manageable level.

The good news: there is. You don’t have to be stuck with sky-high payments. Here are 10 different ways to lower your student loan payment plans or repay your loans early.

  1. Apply for an income-driven repayment plan
  2. Sign up for a Graduated Repayment Plan
  3. Consider an Extended Repayment Plan
  4. Consolidate your loans
  5. Move to another state
  6. Sign up for automatic payments
  7. Make all your payments on time
  8. Get help from your employer
  9. Refinance your student loans
  10. Search for repayment assistance

    1. Apply for an income-driven repayment plan

    If you have federal student loans, you’re automatically enrolled in the Standard Repayment Plan when you graduate. With this plan, your payments are fixed and divided over 10 years. Under a Standard Repayment Plan, you’ll pay the least amount of interest and repay your loan the fastest, but the monthly payments can be high.

    Luckily, there are other student loan payment plans available. There are four different income-driven repayment (IDR) plans where your payments are based on your income:

    Under an IDR plan, the loan servicer extends your repayment term to 20 to 25 years, and caps your monthly payment at a percentage of your discretionary income. Depending on your income, family size, and loan balance, your payment could be as low as $0 a month.

    As your situation changes, your payments will change, too. If your income decreases or increases, or if your family grows, your payment will be adjusted.

    Although your payments can be significantly smaller with an IDR plan, you’ll pay more in interest over the length of the loan. But if you’re struggling to afford your payments, an IDR plan can give you some more breathing room in your budget as you build your career.

    Use the federal repayment estimator to find out what your monthly payment would be under each of the different student loan payment plans.

    2. Sign up for a Graduated Repayment Plan

    If you make too much money to qualify for a lower payment with an IDR plan but still can’t afford your payment for your federal loans, another option is to sign up for a Graduated Repayment Plan.

    Unlike IDR plans, which are based on your income and family size, payments under a Graduated Repayment Plan start out low, then gradually increase every two years. After 10 years, your payments are paid off.

    Because the payments start out so low, you’ll pay more in interest over the length of your loan than you would with a Standard Repayment Plan. Plus, your payments increase every two years, regardless of your income. Even if you have to take a lower-paying job, you’ll still have to make a larger monthly payment.

    3. Consider an Extended Repayment Plan

    If you have more than $30,000 in federal Direct Loans, you might be eligible for an Extended Repayment Plan. With this option, you’ll repay your loan over up to 25 years, and you can choose between fixed and graduated payments.

    Your payments will generally be lower than they would be under a Standard Repayment Plan or Graduated Repayment Plan because of the long term. But it’s not dependent on your income, so it might be cheaper to sign up for an IDR plan instead.

    Although your payments will be low under an Extended Repayment Plan, you could end up paying thousands more than you borrowed because of interest charges.

    4. Consolidate your loans

    If you have multiple federal student loans, all with their own interest rates, repayment terms, and minimum monthly payments, consolidating your debt with a Direct Consolidation Loan can be a wise decision.

    With a Direct Consolidation Loan, you take out another federal loan for the amount of all your old ones. You’ll now have just one monthly payment and one due date to manage.

    Your interest rate will be the weighted average of your previous loans’ rates, so you won’t necessarily get a lower rate. But you can sign up for an IDR plan after consolidating most of your Direct Loans and reduce your payment that way — and have one payment to remember rather than juggling several at once.

    5. Move to another state

    It might sound drastic, but where you live can impact your student loan repayment. Some states offer student loan repayment assistance programs and incentives to new residents, helping you pay off some or all of your loans.

    Programs such as those offered by Texas and Minnesota are essentially free money. But before you pack your bags, make sure you consider other factors, such as your earning potential in the new state and the cost of living.

    6. Sign up for automatic payments

    Most lenders offer discounts for signing up for automatic payments. Connect your bank account, and you could qualify for a 0.25% rate discount. Although that might not sound significant, it can reduce how much you pay over time.

    For example, pretend you had $30,000 in student loans at a 7.00% interest rate. If you were on a Standard Repayment Plan and qualified for the 0.25% discount, you’d save nearly $500.

    7. Make all your payments on time

    Making all your payments on time is important to protect your credit score and avoid late fees. But there’s another reason: You could qualify for an extra discount on your interest rate.

    Some lenders, such as SunTrust, offer a 0.25% rate reduction if you make your payments on time for 36 to 48 months. Combined with the automatic payment discount, you could save a significant amount of money.

    8. Get help from your employer

    To attract top talent, more and more employers are offering student loan repayment assistance. With many programs, employers will match your payments on your loans, much like a 401(k) match. With their help, you can pay off the debt faster and save money.

    Ask your human resources office if your company offers such a program.

    9. Refinance your student loans

    If you have private student loans, you’re not eligible for alternative payment plans such as IDR. If that’s the case, or if you have a mix of federal and private loans, another option to consider is refinancing your student loans.

    With refinancing, you work with a private lender to take out a new loan for the amount of your current ones. The new loan will have different terms, including repayment term, interest rate, and monthly payment. You can opt for a longer repayment term to reduce your monthly bill, and you might qualify for a lower rate that decreases your monthly payment, too.

    For example, if you had $30,000 in student loans at a 7.00% interest rate, you’d pay $348 a month under a 10-year payment plan. And you’d pay $11,799 in interest charges.

    If you refinanced your loans and qualified for a 4.00% interest rate, your new monthly payment under a 15-year term would be $222. Plus, you’d repay just $9,943 in interest. Refinancing would save you nearly $2,000, despite having a longer loan term.

    Not everyone will qualify for refinancing. To maximize your chances of getting approved for a loan, ask a friend or relative with good credit and a stable income to act as a cosigner on the loan. Also, keep in mind that refinancing your loans has some drawbacks, especially if you have federal loans.

    If you decide that refinancing is for you, compare offers from multiple refinancing lenders to get the best rate.

    10. Search for repayment assistance

    It might sound too good to be true, but there are hundreds of legitimate student loan repayment assistance programs. Depending on your occupation and location, your state could provide thousands to help you repay your student loans.

    To find out if you’re eligible, check out our database of repayment assistance programs.

    Choosing student loan payment plans

    If you’re wondering how to lower student loan payments, there are a variety of options from which to choose. Unfortunately, there can be a lot of confusion around what options are available for student loan borrowers. By using this guide, you can find what you need to lower your payments and make them more manageable.

    Before you choose a plan of action, understand what benefits you might give up and calculate how much extra interest you may pay over time. While lowering payments can feel like a quick win, it can also have long-term consequences. Choose wisely.

    Ready to refinance? You can get rate quotes and apply for student loan refinancing online.

    Melanie Lockert contributed to this article.

    Interested in refinancing student loans?

    Here are the top 6 lenders of 2018!
    LenderVariable APREligible Degrees 
    Check out the testimonials and our in-depth reviews!
    1 Important Disclosures for Earnest.

    Earnest Disclosures

    To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.

    Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 6.97% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 6.30% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.

    Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.

    The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at hello@earnest.com, or call 888-601-2801 for more information on ourstudent loan refinance product.

    © 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.


    2 Important Disclosures for Laurel Road.

    Laurel Road Disclosures

    APR stands for “Annual Percentage Rate.” Rates listed include a 0.25% EFT discount, for automatic payments made from a checking or savings account. Interest rates as of 11/8/2018. Rates subject to change.

    Variable rate options consist of a range from 3.27% per year to 6.09% per year for a 5-year term, 4.64% per year to 6.14% per year for a 7-year term, 4.69% per year to 6.19% per year for a 10-year term, 4.94% per year to 6.44% per year for a 15-year term, or 5.19% per year to 6.69% per year for a 20-year term, with no origination fees. APR is subject to increase after consummation. The variable interest rate will change on the first day of every month (“Change Date”) if the Current Index changes. The variable interest rates are based on a Current Index, which is the 1-month London Interbank Offered Rate (LIBOR) (currency in US dollars), as published on The Wall Street Journal’s website. The variable interest rates and Annual Percentage Rate (APR) will increase or decrease when the 1-month LIBOR index changes. The variable interest rates are calculated by adding a margin ranging from 0.98% to 3.80% for the 5-year term loan, 2.35% to 3.85% for the 7-year term loan, 2.40% to 3.90% for the 10-year term loan, 2.65% to 4.15% for the 15-year term loan, and 2.90% to 4.40% for the 20-year term loan, respectively, to the 1-month LIBOR index published on the 25th day of each month immediately preceding each “Change Date,” as defined above, rounded to two decimal places, with no origination fees. If the 25th day of the month is not a business day or is a US federal holiday, the reference date will be the most recent date preceding the 25th day of the month that is a business day. The monthly payment for a sample $10,000 loan at a range of 3.27% per year to 6.09% per year for a 5-year term would be from $180.89 to $193.75. The monthly payment for a sample $10,000 loan at a range of 4.64% per year to 6.14% per year for a 7-year term would be from $139.65 to $146.76. The monthly payment for a sample $10,000 loan at a range of 4.69% per year to 6.19% per year for a 10-year term would be from $104.56 to $111.98. The monthly payment for a sample $10,000 loan at a range of 4.94% per year to 6.44% per year for a 15-year term would be from $78.77 to $86.78. The monthly payment for a sample $10,000 loan at a range of 5.19% per year to 6.69% per year for a 20-year term would be from $67.05 to $75.68.

    However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.


    3 Important Disclosures for SoFi.

    SoFi Disclosures

    1. Student loan Refinance: Fixed rates from 3.899% APR to 7.979% APR (with AutoPay). Variable rates from 2.470% APR to 6.990% APR (with AutoPay). Interest rates on variable rate loans are capped at either 8.95% or 9.95% depending on term of loan. See APR examples and terms. Lowest variable rate of 2.470% APR assumes current 1 month LIBOR rate of 2.30% plus 0.91% margin minus 0.25% ACH discount. Not all borrowers receive the lowest rate. If approved for a loan, the fixed or variable interest rate offered will depend on your creditworthiness, and the term of the loan and other factors, and will be within the ranges of rates listed above. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. *To check the rates and terms you qualify for, SoFi conducts a soft credit inquiry. Unlike hard credit inquiries, soft credit inquiries (or soft credit pulls) do not impact your credit score. Soft credit inquiries allow SoFi to show you what rates and terms SoFi can offer you up front. After seeing your rates, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit inquiry. Hard credit inquiries (or hard credit pulls) are required for SoFi to be able to issue you a loan. In addition to requiring your explicit permission, these credit pulls may impact your credit score.
    2. Terms and Conditions Apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)

    4 Important Disclosures for LendKey.

    LendKey Disclosures

    Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.


    5 Important Disclosures for CommonBond.

    CommonBond Disclosures

    Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.

    All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.28% effective October 10, 2018.


    6 Important Disclosures for Citizens Bank.

    Citizens Bank Disclosures

    1. Education Refinance Loan Rate Disclosure: Variable rate, based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of November 1, 2018, the one-month LIBOR rate is 2.29%. Variable interest rates range from 2.79%-8.39% (2.79%-8.39% APR) and will fluctuate over the term of the borrower’s loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a cosigner. Fixed interest rates range from 3.75%-8.69% (3.75%-8.69% APR) based on applicable terms, level of degree earned and presence of a cosigner. Lowest rates shown require application with a cosigner, are for eligible, creditworthy applicants with a graduate level degree, require a 5-year repayment term and include our Loyalty discount and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty and Automatic Payment Discount disclosures. The maximum variable rate on the Education Refinance Loan is the greater of 21.00% or Prime Rate plus 9.00%. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change. Please note: Due to federal regulations, Citizens Bank is required to provide every potential borrower with disclosure information before they apply for a private student loan. The borrower will be presented with an Application Disclosure and an Approval Disclosure within the application process before they accept the terms and conditions of their loan.
    2. Federal Loan vs. Private Loan Benefits: Some federal student loans include unique benefits that the borrower may not receive with a private student loan, some of which we do not offer with the Education Refinance Loan. Borrowers should carefully review their current benefits, especially if they work in public service, are in the military, are currently on or considering income based repayment options or are concerned about a steady source of future income and would want to lower their payments at some time in the future. When the borrower refinances, they waive any current and potential future benefits of their federal loans and replace those with the benefits of the Education Refinance Loan. For more information about federal student loan benefits and federal loan consolidation, visit http://studentaid.ed.gov/. We also have several resources available to help the borrower make a decision at http://www.citizensbank.com/EdRefinance, including Should I Refinance My Student Loans? and our FAQs. Should I Refinance My Student Loans? includes a comparison of federal and private student loan benefits that we encourage the borrower to review.
    3. Citizens Bank Education Refinance Loan Eligibility: Eligible applicants may not be currently enrolled. Applicants with an Associate’s degree or with no degree must have made at least 12 qualifying payments after leaving school. Qualifying payments are the most recent on time and consecutive payments of principal and interest on the loans being refinanced. Primary borrowers must be a U.S. citizen, permanent resident or resident alien with a valid U.S. Social Security Number residing in the United States. Resident aliens must apply with a cosigner who is a U.S. citizen or permanent resident. The cosigner (if applicable) must be a U.S. citizen or permanent resident with a valid U.S. Social Security Number residing in the United States. For applicants who have not attained the age of majority in their state of residence, a cosigner will be required. Citizens Bank reserves the right to modify eligibility criteria at anytime. Interest rate ranges subject to change. Education Refinance Loans are subject to credit qualification, completion of a loan application/consumer credit agreement, verification of application information, certification of borrower’s student loan amount(s) and highest degree earned.
    4. Loyalty Discount Disclosure: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower or their co-signer (if applicable) has a qualifying account in existence with us at the time the borrower and their co-signer (if applicable) have submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, or other student loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI, and VT and some products may have an associated cost. This discount will be reflected in the interest rate disclosed in the Loan Approval Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
    5. Automatic Payment Discount Disclosure: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their student loans owned by Citizens Bank, N.A. during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. Discount is not available when payments are not due, such as during forbearance. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account three or more times within any 12-month period, the borrower will no longer be eligible for this discount.
    6. Co-signer Release: Borrowers may apply for co-signer release after making 36 consecutive on-time payments of principal and interest. For the purpose of the application for co-signer release, on-time payments are defined as payments received within 15 days of the due date. Interest only payments do not qualify. The borrower must meet certain credit and eligibility guidelines when applying for the co-signer release. Borrowers must complete an application for release and provide income verification documents as part of the review. Borrowers who use deferment or forbearance will need to make 36 consecutive on-time payments after reentering repayment to qualify for release. The borrower applying for co-signer release must be a U.S. citizen or permanent resident. If an application for co-signer release is denied, the borrower may not reapply for co-signer release until at least one year from the date the application for co-signer release was received. Terms and conditions apply.

    2.47% – 6.99%3Undergrad
    & Graduate

    Visit SoFi

    2.47% – 6.30%1Undergrad
    & Graduate

    Visit Earnest

    2.51% – 8.09%4Undergrad
    & Graduate

    Visit Lendkey

    3.02% – 6.44%2Undergrad
    & Graduate

    Visit Laurel Road

    2.69% – 7.21%5Undergrad
    & Graduate

    Visit CommonBond

    2.79% – 8.39%6Undergrad
    & Graduate

    Visit Citizens

    Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.