How to get out of private student loans? Is it possible? There is no forgiveness for private student loans, no doubt, unlike their federal counterparts. The only thing you can do is to pay off your loans or try other means to either reduce your interest rate or the total money owed in debt. Continue reading to learn f ways to get out of private student loan debts.
How to Get Out Of Private Student Loans
Getting forgiveness for private student loans is next to impossible. My counsel is not to even begin in the first place, as it looks like a fool’s race. The only thing you can do to ease the burden of private student loans is discharging them as well as trying out other means in easing the stress of having to pay through your teeth for a long period of time. And in a bit, I will be helping you with some tips on how to get out of private student loans. I also will be answering some of your questions in regard to private student loan forgiveness.
Optimize Your Federal Student Loans If You Have Them
Although it is very difficult to find a private student loan forgiveness program, there are many repayment options for federal student loans, just so you know. And these very options available to you can be especially helpful when times get tough.
For example, let’s say that you have had a career change that got to result in reduced income. In that very case, an income-driven repayment plan (IDR) for the federal part of your student loan debt could be a great solution. An income-driven repayment plan will help to cap your monthly federal student loan payment but based on just how much money you make.
And in essence, rather than just paying off your federal and private loans equally, you could equally make use of an IDR to lower your federal student loan payment. You can then take those excess funds and gear them toward your private student loan, thus paying more than the monthly minimum amount that is due.
And since private student loans tend to have higher interest rates than federal ones, this type of shuffling of funds fits very well with the debt avalanche method, which as you should know targets high-interest debt first. This very type of approach could save you a significant amount in interest costs over time.
Find an Employer That Offers Workers Student Loan Assistance
This very tactic in question may not apply to everyone, but if it is that you are open to a new job, then you could deliberately seek out companies that help their employees in paying off their student loans.
Many companies as you should know offer a student loan matching benefit, which is very much similar to a 401(k) matching benefit, which can in the long run help keep your repayment on track.
Get a Side Hustle
If it is that you are not eligible for a raise, then you just might consider a side hustle. Many side hustles are more lucrative than others, but however, when it comes to paying off your student loans, every single dollar really counts.
For instance, imagine your loan balance is $35,000, with an interest rate of 5%. If it is that you have a 10-year loan term, then your monthly payment would be $371. And putting just $50 extra a month toward this loan would take close to a year and a half off of its life, thus saving you $1,500 in interest payments.
Can Private Student Loans Be Discharged In Bankruptcy
It is very possible to discharge student loans in bankruptcy although it is very difficult. Bankruptcy generally for student loans only applies in most extreme circumstances. And in order to qualify, you must demonstrate and show that paying off your student loans will cause you undue financial hardship. You should also know that the methods used by courts in determining the definition of undue financial hardship vary. To get more information on how to go about it, it may be best to consult a lawyer that specializes in cases like these.
Can I Convert My Private Student Loans To Federal?
Unfortunately, you cannot convert a private student loan to a federal loan via refinancing or any other means. And also, since federal loans come with more flexible repayment plans and options as well as lower interest, it is best to get rid of your private loans first.
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