While the opportunities to reduce the interest rates attached to your private loans may not be as robust as those of federal loans, they, nonetheless, do exist. My hope is that is article will inform you about your options so you can make the best financial decisions for you.
If you have private loans with Sallie Mae…
As of July 1, 2013, Sallie Mae introduced the Graduated Repayment Period (GRP). Sallie Mae offers a six-month grace period after graduation. During this time, a borrower is excused from making payments toward his/her loans. Traditionally, the borrower would then have to begin making monthly payments that include principal and interest. Under the GRP, however, the borrower only has to pay accrued interest for the first 12 months of repayment. This means that recent graduates have 18 months before being required to pay toward the principal. Like with many repayment programs, this can lead to higher payments later and a more expensive total loan amount, but it helps consumers get on their feet after graduation. This is particularly important for those who struggle to find work.
In addition to the Graduated Repayment Period, Sallie Mae has the 12-month rate reduction program. This program offers lower interest rates, as low as 1 percent, and sometimes includes a modification of the loan term. To qualify, borrowers must first make three consecutive on-time monthly payments at a reduced rate.
If you have private loans with Wells Fargo…
Private student loan borrowers who are interning, in a residency or fellowship, or are even still enrolled less than half-time as a student might be eligible for its forbearance policy. Wells Fargo also offers an extended grace period for those who qualify.
In terms of relief from student loans because of economic hardship, the following is available: short-term payment relief, payment relief of up to six months, and “payment options” for those who are past due.
If you have private loans with Discover…
Discover offers in-school deferment for students who are enrolled with at least half-time status. They then allow deferment for certain occupations:
If you want to refinance your private loans…
If you are interested in refinancing your loans for lower rates, SoFi is an excellent resource to know about. SoFi stands for Social Finance. The company brings together alumni from universities and colleges with investors to refinance loans, offering variable rates as low as 2.92% and fixed rates as low as 4.99%.
This is a viable option for borrowers with a very good credit history. On top of that, SoFi provides users with access to alumni-driven SoFi network, which comes with additional career services for borrowers.
Frugal Feministas: So what say you? Feeling a tinge better about how to repay your private loans?
“If you’re drowning in student loan debt and want support, strategy, and guidance on how to accelerate your student loan repayments, then join our 5-Day Slay Sallie Mae Challenge.