Can I get private student loans forgiven? Private student loans normally do not qualify for forgiveness, but there are a couple of alternatives you can try out to work around it.
Can I Get Private Student Loans Forgiven
Unlike federal student loans, you cannot get forgiveness with private student loans as they work differently from federal student loans. They also do not qualify for forgiveness and also have fewer protections.
Financial institutions such as credit unions, banks, and online lenders originate private student loans, which at most times have higher interest rates than their federal counterparts and fewer repayment options. In regards to private student loans, lending decisions are at most times based on creditworthiness, and you may also need a cosigner.
If you have federal student loans, then you also have additional options to have your loans easily forgiven and this is including Public Service Loan Forgiveness and income-driven repayment plans. These however are not available for private loans either.
And while your options are more limited with private loans, there are other ways to get a lower rate or even reduce your monthly payment. These three strategies that will be mentioned in this post will help you save money immediately as well as in the long term.
Private Student Loan Forgiveness Alternatives
Private student loans normally cannot be forgiven and they also have fewer options in contrast to federal student loans. With that being said, here are some of the ways through which you can work around your private student loans;
Refinance Your Loans for a Lower and Singular Monthly Payment
The rate at which you initially qualified when you took out your private student loans may be higher than the rate that you are eligible for now, especially in the event that you have improved your financial situation and creditworthiness down the line. You can easily refinance with the very same lender or even shop around to see if you can find a better rate elsewhere.
You also can refinance in a bid to extend your term length, which however would lower your monthly payments although if you keep the very same interest rate, you will end up paying more in total interest over the life span of your loan.
It also may get to be difficult to keep track of different monthly payments, most especially in the case that you have a loan with multiple lenders that carry different interest rates. You can easily combine both private and federal student loans into a singular loan simply by refinancing your loans, thus making it easier to stay on top of your responsibilities. You however should be careful before refinancing your federal loans though, as you will very much likely lose key protections, such as Public Service Loan Forgiveness and Income-Driven Repayment Plans, in the process.
Check Out Loan Payment Assistance Programs
Many states have programs that help borrowers make loan payments if they work in certain professions in the state. You will however need to check with your state in order to find out the availability of these programs in question. Some states that offer services like this include California, Florida, and Texas amongst many others.
Contact Your Lender to Request Forbearance
Forbearance as you should know is an option that lets you to temporarily pause your student loan payments. You will however need to reach out to your lender to get to see if it offers forbearance. And while interest will likely still accrue during a period of nonpayment, you might get a very much-needed financial reprieve simply by not having to make full payments every month.
Forbearance, however, isn’t a long-term solution, just so you know. The interest that capitalizes at the end of the nonpayment period could at the end of the day add hundreds or thousands of dollars to the total cost of your loan in total.
Some lenders however have specific programs in place to help you in the event that the COVID-19 pandemic has impacted you financially. And this includes some emergency forbearance options that may be very much different or more lenient than the standard forbearance options of the lender.
While private student loans are not eligible for forbearance in the same way that federal student loans are, you might still have options if it is that you are struggling to keep up with your payments.
MORE RELATED POSTS