Your long-term student loan repayment goal isn’t too difficult to figure out — like everyone else, you want to be debt-free.
The complicated part is how to get there, and setting immediate goals could lay the groundwork. Let’s review 10 such short-term aims and reveal how they could spur you toward the debt-free finish line.
If you like, skip ahead to the goal that could make the most sense for your repayment. Keep in mind that you might bounce around this list once you accomplish one goal and move onto another.
1. Locate your loans
If you’re near the end of your grace period or are just starting your repayment, a short-term goal could be to determine what you owe and to whom. After all, it’s hard to become debt-free when you’re not fully aware of your debt.
If you borrowed federal loans, start with the National Student Loan Data System, which lists your balance and assigned loan servicer. To access the system, you’ll need to recover or create your Federal Student Aid ID.
Tracking down private loans (if you borrowed any) might be more difficult. If you don’t remember the name of your lender, start with your credit report, which you can access at AnnualCreditReport.com. You can also confirm your lender’s information with your school, which would have had to certify your private loan amount when you originally borrowed it.
2. Decrease your payment amount
Lowering the amount due on your loan balance each month would slow your speed toward achieving a zero balance. But when done right, it could give you the breathing room you need to keep pace with your debt — before eventually re-accelerating your efforts.
If your current monthly payment is unaffordable, or if you’re planning to pay less now and receive loan forgiveness later (see goal #10, below), here’s how to accomplish it:
- Federal loans: Switch to an income-driven repayment (IDR) plan.
- Federal and private loans: Refinance your debt to a longer repayment term, say, from 10 years to a new 15-year term.
3. Pause your loan payments
Like lowering your payments, pausing them comes with the expense of accruing and capitalizing interest. Still, it could give you the respite you need to reset your loan repayment strategy.
Pressing pause on your payments could be especially useful if you’ve suffered a job loss, medical emergency or another economic hardship. Here’s how to do it:
- Federal loans: Apply for deferment or forbearance, depending on which program is right for your situation.
- Private loans: Contact your lender immediately to discuss your options — some banks, credit unions and online lenders offer forbearance in times of financial stress
4. Increase your payment amount
When it’s realistic, making more or larger payments per month is among the sure-fire strategies to end your debt faster.
Maybe you scored a raise at work, found a trimmable expense in your budget or received another sort of financial windfall. Whatever the case, if your federal loan servicer or lender is asking for monthly dues below what you can reasonably afford, you could:
- Pay more than the minimum or pay more often than monthly (but make sure those payments are applied correctly).
- Refinance to a shorter repayment term, say, from 10 years to five.
5. Stop missing your payment due dates
Not all goals have to be complicated. With this one, you aim to ensure you never face another late payment fee and the associated interest charges.
Whether you have federal or private loans, the prescription is the same: Set up autopay from the bank account you use to make payments.
In addition, to avoid the possibility of overdraft fees for months when your account might be a little light, consider creating a budget. This way, barring an unforeseen budget-busting event, you’ll always have enough savings to at least pay the minimum.
6. Escape loan default
If you located your loans (see goal #1, above), you might find yourself here, pursuing another short-term goal.
Escaping student loan default is a long process, but it’s a critical near-term aim if erasing your student loans is to become a reality. Your debt entered default when you failed to make a payment for at least 270 days (federal loans) or perhaps much sooner (private).
Here’s how to cross this goal off the list too:
- Federal loans: Rehabilitate or consolidate your debt by making nine payments over the next 10 months (rehabilitation) or by getting a consolidation loan after making three straight payments or switching to an IDR plan (consolidation)
- Private loans: Contact your lender as soon as possible to review your options, which could include making a catch-up lump-sum payment and entering forbearance
7. Switch federal loan servicers or lenders
The goal of switching servicers or lenders is a worthwhile one. It’ll be easier to work toward your debt’s end when you feel like you’re working with — not against — your creditor.
Consider your options:
- Federal loans: When you apply for a Direct Consolidation Loan, you can choose any of the Department of Education’s nine loan servicers to manage your repayment.
- Federal and private loans: By refinancing with a private lender, you can select which bank, credit union or online lender meets your needs best.
8. Simplify your repayment
If you’re anything like the average American borrower, you have a handful of student loans managed by different loan servicers or lenders. Even if you don’t have a problem with your creditors, you might be unhappy sending payments to a variety of places every month.
Now imagine you could instead submit just one monthly payment to one lender. Plus, every time you have a comment, question or concern about your repayment, you wouldn’t have to make the same phone call twice.
Fortunately, there are ways to combine your debt into one loan. The drill is similar to dealing with bad servicer or lender (see goal #7, above):
- Federal loans: Apply for a Direct Consolidation Loan.
- Private loans: Consolidate and refinance your student loans simultaneously with a bank, credit union or online lender.
9. Reduce your interest rates
If you never miss loan payments (see goal #6, above), you already know that lenders often award nominal interest rate reductions when you sign up for autopay.
Usually, the only other way to reduce your loans’ fixed or variable rates is to refinance the lot with a private lender. By refinancing, not only can you consolidate your debt (see goal #8, above), but also potentially save money by scoring a lower interest rate. The lower your rate, the less interest you’ll need to repay, as our student loan refinancing calculator can attest.
If you’re considering refinancing to score a lower rate, understand the trade-offs before shopping around. Refinancing is irreversible, so when you give up federal loan protections like access to forgiveness (see goal #10, below), you will yield them forever.
10. Apply for loan forgiveness or repayment assistance
You might think this is a long-term goal — Public Service Loan Forgiveness (PSLF), for example, takes 10 years of prompt payments and eligible employment to take effect.
But if you don’t start working toward forgiveness or repayment assistance in the short term, it won’t happen.
With PSLF, for example, you’ll complete a certification form annually to ensure your public or nonprofit employer is eligible for the program.
At the very least, investigate your eligibility for federal loan forgiveness programs. Plus, seek out employers offering 401(k)-style matching for student loan payments and similar perks.
Set your goal and stick to it
If repaying your four-, five- or six-digit student loan balance seems like an unachievable long-term goal, start shorter. Identify near-term objectives that can help you reach the end of your debt.
If you’re feeling overwhelmed by next month’s payment, for example, you might start by considering a pause on your repayment (goal #3). After you catch your breath and regain your confidence, maybe you’ll be ready to increase your payment amount (goal #4). With a full head of steam, you might then look to consolidate your loans (goal #8) or reduce your interest rate (goal #9).
No two borrowers’ path from goal to goal will look the same. The key is to gain your footing and start moving forward, one goal at a time.
Interested in refinancing student loans?Here are the top 9 lenders of 2021!
|Lender||Variable APR||Eligible Degrees|
|1.88% – 6.15%1||Undergrad & Graduate|
|1.88% – 5.64%2||Undergrad & Graduate|
|2.50% – 6.85%3||Undergrad & Graduate|
|1.89% – 5.90%4||Undergrad & Graduate|
|1.99% – 6.59%5||Undergrad & Graduate|
|1.88% – 5.64%6||Undergrad & Graduate|
|1.90% – 5.25%7||Undergrad & Graduate|
|2.39% – 6.01%||Undergrad |
|2.13% – 5.25%8||Undergrad & Graduate|
|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 June 1, 2021.
2 Rate range above includes optional 0.25% Auto Pay discount. Important Disclosures for Earnest.
Interest Rate Disclosure
Actual rate and available repayment terms will vary based on your income. Fixed rates range from 2.48% APR to 5.79% APR (excludes 0.25% Auto Pay discount). Variable rates range from 1.88% APR to 5.64% APR (excludes 0.25% Auto Pay discount). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 36% (the maximum allowable for these loans). Earnest variable interest rate student loan refinance 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 2.04% and 5.8% to the one month LIBOR. Earnest rate ranges are current as of 6/8/2021, and are subject to change based on market conditions.
Auto Pay Discount Disclosure
You can take advantage of the Auto Pay interest rate reduction by setting up and maintaining active and automatic ACH withdrawal of your loan payment. The interest rate reduction for Auto Pay will be available only while your loan is enrolled in Auto Pay. Interest rate incentives for utilizing Auto Pay may not be combined with certain private student loan repayment programs that also offer an interest rate reduction. For multi-party loans, only one party may enroll in Auto Pay.
Student Loan Refinancing Loan Cost Examples
These examples provide estimates based on payments beginning immediately upon loan disbursement. Variable APR: A $10,000 loan with a 20-year term (240 monthly payments of $72) and a 5.89% APR would result in a total estimated payment amount of $17,042.39. For a variable loan, after your starting rate is set, your rate will then vary with the market. Fixed APR: A $10,000 loan with a 20-year term (240 monthly payments of $72) and a 6.04% APR would result in a total estimated payment amount of $17,249.77. Your actual repayment terms may vary.Terms and Conditions apply. Visit https://www.earnest. com/terms-of-service, e-mail us at [email protected], or call 888-601-2801 for more information on our student loan refinance product.
Earnest Loans are made by Earnest Operations LLC or One American Bank, Member FDIC. Earnest Operations LLC, NMLS #1204917. 535 Mission St., Suite 1663, San Francisco, CA 94105. California Financing Law License 6054788. Visit earnest.com/licenses for a full list of licensed states. For California residents (Student Loan Refinance Only): Loans will be arranged or made pursuant to a California Financing Law License.
One American Bank, 515 S. Minnesota Ave, Sioux Falls, SD 57104. Earnest loans are serviced by Earnest Operations LLC with support from Navient Solutions LLC (NMLS #212430). One American Bank and Earnest LLC and its subsidiaries are not sponsored by or agencies of the United States of America.
© 2021 Earnest LLC. All rights reserved.
3 Important Disclosures for CommonBond.
Offered terms are subject to change and state law restriction. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900), NMLS Consumer Access. 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 0.15% effective Jan 1, 2021 and may increase after consummation.
4 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 April 29, 2021. Information and rates are subject to change without notice.
5 Important Disclosures for SoFi.
Fixed rates from 2.49% APR to 6.94% APR (with autopay). Variable rates from 1.99% APR to 6.59% APR (with autopay). All variable rates are based on the 1-month LIBOR and may increase after consummation if LIBOR increases; see more at SoFi.com/legal/#1. If approved for a loan your rate will depend on a variety of factors such as your credit profile, your application and your selected loan terms. Your rate will be within the ranges of rates listed above. Lowest rates reserved for the most creditworthy borrowers. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Income Based Repayment or Income Contingent Repayment or PAYE. SoFi loans are originated by SoFi Lending Corp. or an affiliate (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license #6054612; NMLS #1121636 (www.nmlsconsumeraccess.org). Additional terms and conditions apply; see SoFi.com/eligibility for details. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.
6 Important Disclosures for Navient.
7 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 04/07/2021 student loan refinancing rates range from 1.90% APR – 5.25% Variable APR with AutoPay and 2.49% APR – 7.75% Fixed APR with AutoPay.
8 Important Disclosures for PenFed.
Annual Percentage Rate (APR) is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. Fixed Rates range from 2.89%-4.78% APR and Variable Rates range from 2.13%-5.25% APR. Both Fixed and Variable Rates will vary based on application terms, level of degree and presence of a co-signer. These rates are subject to additional terms and conditions and rates are subject to change at any time without notice. For Variable Rate student loans, the rate will never exceed 9.00% for 5 year and 8 year loans and 10.00% for 12 and 15 years loans (the maximum allowable for this loan). Minimum variable rate will be 2.00%. These rates are 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.