Refinancing with Laurel Road
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Although private student loans can fill a gap in funding, they can be tough to pay back. Not only do private student loans have fewer repayment plans than federal ones, but your options for private student loan forgiveness are virtually nonexistent.
That said, some states and employers offer student loan repayment assistance to help you pay off private student loan debt. Plus, you might be able to adjust payments by speaking with your lender or applying for student loan refinancing.
If you’re dealing with burdensome private student loans — and coming up short in your search for private student loan forgiveness — read on to learn about alternative options that could help you.
What to do if you need private student loan forgiveness
Although private student loan forgiveness programs don’t exist, you have other options. Here’s what you could do if you have private student loans and need to find some breathing room.
1. Talk to your lender
2. Refinance your student loans
3. Explore private student loan repayment assistance programs
4. Optimize your federal loans (if you have them)
5. Look for updates on private student loan forgiveness
6. Find new ways to increase your income
The first thing you need to do if you’re struggling with your private student loans is to contact your lender. Every company is different, so it’s important to explore your options with yours.
Your lender likely doesn’t offer private student loan forgiveness. But it might still be able to help you in other ways.
For example, many top student loan refinancing companies offer deferment or forbearance. These options enable you to temporarily postpone your payments, giving you some breathing room while also helping you avoid delinquency.
However, you can only be in deferment or forbearance for a limited amount of time, which will vary based on your lender.
If you’re struggling with repayment and looking for private student loan forgiveness, it’s crucial that you contact your lender and don’t just abandon your payments.
Abandoning your payments will seriously hurt your credit. And that can make it difficult for you to obtain new credit in the future.
Refinancing private student loans could make it easier to manage your monthly payments.
Through student loan refinancing, you can consolidate all of your loans. If you qualify for a better interest rate than you have now, you can decrease your monthly payments.
Some refinancing lenders have other ways they can help borrowers. For example, some lenders — such as SoFi — offer extra benefits such as unemployment protection. This program not only helps you temporarily suspend your payments if you become involuntarily unemployed, but it also gives you access to career advisory services via SoFi.
If you’re interested in exploring refinancing as an option, you can find several refinancing lenders on our student loan consolidation and refinancing page.
Although you won’t find private student loan forgiveness programs (these are reserved for federal loans), you might be able to get help paying off your private student loan balance. Most states offer student loan repayment assistance programs (LRAPs) to qualifying professionals.
Some people who commonly qualify include teachers, nurses, doctors, lawyers, pharmacists and dentists. Although some of these programs might be limited to federal loans, others may pay off private student debt as well.
What’s more, some companies offer a student loan matching benefit, similar to a 401(k) matching benefit. If you’re open to a new job, look for companies that help their employees pay off their student loans.
A few states also have unique programs that help new residents pay off their loans. The Kansas Rural Opportunity Zones program, for example, pays $15,000 over five years to qualifying borrowers who move to an eligible area in Kansas. So if you’re looking for an out-of-the-box solution and are open to relocating, a program like this could be worth exploring.
Before dedicating a lot of time to one of these programs, though, read the fine print to make sure it will help pay off private student loans. You wouldn’t want to uproot your life only to find out your private student debt isn’t eligible for repayment assistance.
While you don’t have many options for private student loan forgiveness programs, you have a lot more for federal student loans, if you have them.
Federal loans come with a variety of repayment options to help when times are tough. You can utilize these options to ease the burden of your federal loan monthly payments and free up more cash. Hopefully, this will make it easier for you to pay down your private student loans.
Paying down more of your private student loans first also follows the debt avalanche payoff method. Here’s how it works:
- The debt avalanche method advises targeting high-interest rate debt first.
- All extra payments should go to that expensive debt while the lower-interest-rate debt gets minimum payments.
- Once your target account is paid off, apply its payments on top of your next target account’s minimum.
- Do this repeatedly until all of your debt accounts are paid off.
This plan works because it reduces the debt that costs you the most money first. It also creates momentum — as one account is paid off, you roll over its payments to another account. Suddenly that next account will be paid off a lot faster, and so on.
Now, here’s how that applies to your student loans:
- If you’re either struggling to make all your payments or have nothing left to pay extra, you can use an income-driven repayment plan to reduce your federal loan monthly payments.
- Apply the difference that you were paying on your federal loans before the income-driven repayment plan to your private student loans.
- You’ll stay current on your federal loans by paying the minimum due per the income-driven repayment plan, while also eliminating your high-interest private student loans faster.
Since private student loans tend to come with a higher interest rate, targeting them first lines up with the debt avalanche method nicely.
Student loan debt is an ever-changing arena. The laws governing collections on student loans can change as quickly as administrations do. That’s why it’s important to stay on top of news as it comes out.
Right now there are no moves from the current administration to add any private student loan forgiveness programs. In fact, there are more proposals to reduce benefits for student loan borrowers than there are to add.
That said, there’s still hope for positive change. And as a constituent, you have a right to contact your local representatives about laws that are up for a vote.
This option has nothing to do with private student loan forgiveness — but it’s worth mentioning because of the sheer impact it can have on your student loan repayment.
If you know you’re not eligible for a raise or think you don’t have time to work more, consider looking into side hustles.
Let’s say you earn $400 extra per month for some freelance work and apply it directly to your student loan payments. Here’s how much of a difference that would make:
- If your loan balance is currently $35,000 and your interest rate is 5.00% with a monthly payment of $371 over 10 years, one extra $400 payment will save you $239 and take two months off the life of your loan.
- If you made that extra $400 payment from your side income every month, you’ll save $5,679 on your debt overall and pay it off five years and nine months early.
Finding ways to increase your income can change the game on your finances. And that extra income could be the push you needed to make ends meet or get ahead.
Think about it this way: If you find the right side hustle, you can do more than earn extra money. You can also build your skills and network. And that can help increase your chances of success and income potential as you go.
Talking to your lender is your best bet
Knowing that federal student loans qualify for forgiveness options that private student loans don’t is frustrating, to say the least. But don’t let that frustration keep you from seeking help when you need it.
Of all the options listed above, talking to your lender could be one of the most effective. Leslie H. Tayne of Tayne Law Group, a financial attorney and author of “Life & Debt,” explained this in more detail: “First, I would recommend speaking with your loan provider. While they won’t forgive your student loans just by asking, they may be willing to lower your monthly bill or work out a payment option that works for you.”
Choosing not to speak with your lender when you need to will only lead to more problems. Delinquencies and default will damage your credit for years to come. And bankruptcy won’t likely be a backup plan you can count on.
“Unfortunately, graduates believe bankruptcy is a viable option for throwing away their student loans,” said Tayne. “The truth is unless you have an extreme hardship, it’s going to be near impossible to discharge your student loans through bankruptcy.”
If you fear you won’t be able to sustain your monthly payments any longer, contact your lender. They’ll tell you what options might be available to you. That will be your best chance at taking charge of your private student loans before they take charge of you.
Rebecca Safier contributed to this article.
Interested in refinancing student loans?Here are the top 6 lenders of 2021!
|Lender||Variable APR||Eligible Degrees|
|1.89% – 6.66%1||Undergrad & Graduate|
|1.99% – 5.64%2||Undergrad & Graduate|
|1.89% – 5.90%3||Undergrad & Graduate|
|2.25% – 6.43%4||Undergrad & Graduate|
|1.99% – 8.56%5||Undergrad & Graduate|
|2.39% – 6.01%||Undergrad |
|Check out the testimonials and our in-depth reviews! |
1 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. If approved, your actual rate will be within a range of rates and will depend on a variety of factors, including term of loan, a responsible financial history, income and other factors. Refinancing or consolidating private and federal student loans may not be the right decision for everyone. Federal loans carry special benefits not available for loans made through Splash Financial, for example, public service loan forgiveness and economic hardship programs, fee waivers and rebates on the principal, which may not be accessible to you after you refinance. The rates displayed may include a 0.25% autopay discount.
The information you provide to us is an inquiry to determine whether we or our lenders can make a loan offer that meets your needs. If we or any of our lending partners has an available loan offer for you, you will be invited to submit a loan application to the lender for its review. We do not guarantee that you will receive any loan offers or that your loan application will be approved. Offers are subject to credit approval and are available only to U.S. citizens or permanent residents who meet applicable underwriting requirements. Not all borrowers will receive the lowest rates, which are available to the most qualified borrowers. Participating lenders, rates and terms are subject to change at any time without notice.
To check the rates and terms you qualify for, Splash Financial conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, the lender will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
Splash Financial and our lending partners reserve the right to modify or discontinue products and benefits at any time without notice. To qualify, a borrower must be a U.S. citizen and meet our lending partner’s underwriting requirements. Lowest rates are reserved for the highest qualified borrowers. This information is current as of October 1, 2020.
2 Important Disclosures for Earnest.
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 2.98% APR (with Auto Pay) to 5.49% APR (with Auto Pay). Variable rate loan rates range from 1.99% APR (with Auto Pay) to 5.34% 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 October 26, 2020, 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 10/26/2020. 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 [email protected], or call 888-601-2801 for more information on our student loan refinance product.
© 2020 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.
3 Important Disclosures for Laurel Road.
Laurel Road Disclosures
All credit products are subject to credit approval.
Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. 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. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com.
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.
Assumptions: Repayment examples above assume a loan amount of $10,000 with repayment beginning immediately following disbursement. Repayment examples do not include the 0.25% AutoPay Discount.
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.
Interest Rate: A simple annual rate that is applied to an unpaid balance.
Variable Rates: The current index for variable rate loans is derived from the one-month London Interbank Offered Rate (“LIBOR”) and changes in the LIBOR index may cause your monthly payment to increase. Borrowers who take out a term of 5, 7, or 10 years will have a maximum interest rate of 9%, those who take out a 15 or 20-year variable loan will have a maximum interest rate of 10%.
KEYBANK NATIONAL ASSOCIATION RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.
This information is current as of January 4, 2021. Information and rates are subject to change without notice.
4 Important Disclosures for SoFi.
5 Important Disclosures for LendKey.
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 12/07/2020 student loan refinancing rates range from 1.99% to 8.56% Variable APR with AutoPay and 2.95% to 8.77% Fixed APR with AutoPay.