The Ultimate Guide to Lowering Your Student Loan Payments

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Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality. 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 to help you understand what you are buying. Be sure to consult with 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.

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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 7 lenders of 2019!
    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 3.45% APR (with Auto Pay) to 6.99% APR (with Auto Pay). Variable rate loan rates range from 1.81% APR (with Auto Pay) to 6.49% 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 November 6, 2019, 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 11/06/2019. 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 our student 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 SoFi.

    SoFi Disclosures

    1. Student loan Refinance: Fixed rates from 3.46% APR to 5.98% APR (with AutoPay). Variable rates from 1.81% APR to 5.98% 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 1.81% APR assumes current 1 month LIBOR rate of 1.81% minus 0.15% 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. See eligibility details. 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. Terms and Conditions Apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.

    3 Important Disclosures for Laurel Road.

    Laurel Road Disclosures

    Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. Mortgage lending is not offered in Puerto Rico. All loans are provided by KeyBank National Association.
    As used throughout these Terms & Conditions, the term “Lender” refers to KeyBank National Association and its affiliates, agents, guaranty insurers, investors, assigns, and successors in interest.

    ANNUAL PERCENTAGE RATE (“APR”)
    This term represents the actual cost of financing to the borrower over the life of the loan expressed as a yearly rate.

    FEE INFORMATION

    There are no origination fees or prepayment penalties associated with the loan. Lender may assess a late fee if any part of a payment is not received within 15 days of the payment due date. Any late fee assessed shall not exceed 5% of the late payment or $28, whichever is less. A borrower may be charged $20 for any payment (including a check or an electronic payment) that is returned unpaid due to non-sufficient funds (NSF) or a closed account.

    LOAN AMOUNT

    For bachelor’s degrees and higher, up to 100% of outstanding private and federal student loans (minimum $5,000) are eligible for refinancing. If you are refinancing greater than $300,000 in student loan debt, Lender may refinance the loans into 2 or more new loans.
    For eligible Associates degrees in the healthcare field (see Eligibility & Eligible Loans section below), Lender will refinance up to $50,000 in loans for non-ParentPlus refinance loans. Note, parents who are refinancing loans taken out on behalf of a child who has obtained an associates degrees in an eligible healthcare field are not subject to the $50,000 loan maximum, refer to https://www.laurelroad.com/refinance-student-loans/refinance-parent-plus-loans/ for more information about refinancing ParentPlus loans.

    ELIGIBILITY & ELIGIBLE LOANS

    Borrower, and Co-signer if applicable, must be a U.S. Citizen or Permanent Resident with a valid I-551 card (which must show a minimum of 10 years between “Resident Since” date and “Card Expires” date or has no expiration date); state that they are of at least borrowing age in the state of residence at the time of application; and meet Lender underwriting criteria (including, for example, employment, debt-to-income, disposable income, and credit history requirements).

    Graduates may refinance any unsubsidized or subsidized Federal or private student loan that was used exclusively for qualified higher education expenses (as defined in 26 USC Section 221) at an accredited U.S. undergraduate or graduate school. Any federal loans refinanced with Lender are private loans and do not have the same repayment options that federal loan program offers such as Income Based Repayment or Income Contingent Repayment.

    All loans must be in grace or repayment status and cannot be in default. Borrower must have graduated or be enrolled in good standing in the final term preceding graduation from an accredited Title IV U.S. school and must be employed, or have an eligible offer of employment. Parents looking to refinance loans taken out on behalf of a child should refer to https://www.laurelroad.com/refinance-student-loans/refinance-parent-plus-loans/ for applicable terms and conditions.

    For Associates Degrees: Only associates degrees earned in one of the following are eligible for refinancing: Cardiovascular Technologist (CVT); Dental Hygiene; Diagnostic Medical Sonography; EMT/Paramedics; Nuclear Technician; Nursing; Occupational Therapy Assistant; Pharmacy Technician; Physical Therapy Assistant; Radiation Therapy; Radiologic/MRI Technologist; Respiratory Therapy; or Surgical Technologist. To refinance an Associates degree, a borrower must also either be currently enrolled and in the final term of an associate degree program at a Title IV eligible school with an offer of employment in the same field in which they will receive an eligible associate degree OR have graduated from a school that is Title IV eligible with an eligible associate and have been employed, for a minimum of 12 months, in the same field of study of the associate degree earned.

    INTEREST RATES

    The interest rate you are offered will depend on your credit profile, income, and total debt payments as well as your choice of fixed or variable and choice of term. For applicants who are currently medical or dental residents, your rate offer may also vary depending on whether you have secured employment for after residency.

    DISBURSEMENT OPTIONS

    The repayment of any refinanced student loan will commence (1) immediately after disbursement by us, or (2) after any grace or in-school deferment period, existing prior to refinancing and/or consolidation with us, has expired.

    POSTPONING OR REDUCING PAYMENTS

    After loan disbursement, if a borrower documents a qualifying economic hardship, we may agree in our discretion to allow for full or partial forbearance of payments for one or more 3-month time periods (not to exceed 12 months in the aggregate during the term of your loan), provided that we receive acceptable documentation (including updating documentation) of the nature and expected duration of the borrower’s economic hardship.

    We may agree under certain circumstances to allow a borrower to make $100/month payments for a period of time immediately after loan disbursement if the borrower is employed full-time as an intern, resident, or similar postgraduate trainee at the time of loan disbursement. These payments may not be enough to cover all of the interest that accrues on the loan. Unpaid accrued interest will be added to your loan and monthly payments of principal and interest will begin when the post-graduate training program ends.

    We may agree under certain circumstances to allow postponement (deferral) of monthly payments of principal and interest for a period of time immediately following loan disbursement (not to exceed 6 months after the borrower’s graduation with an eligible degree), if the borrower is an eligible student in the borrower’s final term at the time of loan disbursement or graduated less than 6 months before loan disbursement, and has accepted an offer of (or has already begun) full-time employment.

    If Lender agrees (in its sole discretion) to postpone or reduce any monthly payment(s) for a period of time, interest on the loan will continue to accrue for each day principal is owed. Although the borrower might not be required to make payments during such a period, the borrower may continue to make payments during such a period. Making payments, or paying some of the interest, will reduce the total amount that will be required to be paid over the life of the loan. Interest not paid during any period when Lender has agreed to postpone or reduce any monthly payment will be added to the principal balance through capitalization (compounding) at the end of such a period, one month before the borrower is required to resume making regular monthly payments.

    KEYBANK NATIONAL ASSOCIATION RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.

    This information is current as of November 8, 2019 and is subject to change.


    4 Important Disclosures for Splash Financial.

    Splash Financial Disclosures

    Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet applicable underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates are reserved for the highest qualified borrowers.


    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 1.9299999999999997% effective October 10, 2019.


    6 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.

    Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised variable APR is only available for loan terms of  5 years and is reserved for applicants with FICO scores of at least 810.

    As of 11/07/2019 student loan refinancing rates range from 1.79% to 8.65% Variable APR with AutoPay and 3.49% to 7.75% Fixed APR with AutoPay.

     


    7 Important Disclosures for College Ave.

    College Ave Disclosures

    College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.

    1College Ave Refi Education loans are not currently available to residents of Maine.

    2All rates shown include autopay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.

    3$5,000 is the minimum requirement to refinance. The maximum loan amount is $300,000 for those with medical, dental, pharmacy or veterinary doctorate degrees, and $150,000 for all other undergraduate or graduate degrees.

    4This informational repayment example uses typical loan terms for a refi borrower with a Full Principal & Interest Repayment and a 10-year repayment term, has a $40,000 loan and a 5.5% Annual Percentage Rate (“APR”): 120 monthly payments of $434.11 while in the repayment period, for a total amount of payments of $52,092.61. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.

    Information advertised valid as of 09/23/2019. Variable interest rates may increase after consummation.

    1.81% – 6.49%1Undergrad
    & Graduate

    Visit Earnest

    1.81% – 5.98%2Undergrad
    & Graduate

    Visit SoFi

    1.99% – 6.65%3Undergrad
    & Graduate

    Visit Laurel Road

    2.43% – 7.60%4Undergrad
    & Graduate

    Visit Splash

    2.02% – 7.09%5Undergrad
    & Graduate

    Visit CommonBond

    1.79% – 8.65%6Undergrad
    & Graduate

    Visit Lendkey

    2.74% – 6.24%7Undergrad
    & Graduate

    Visit College Ave

    Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality. 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 to help you understand what you are buying. Be sure to consult with 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.

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