How To Maintain Your Sanity And Pay Down Your Loans

It pays to understand federal student loan repayment plans especially if you have been making payments on student loans for years or you are just starting to pay them back. You can choose to switch to a new repayment plan even if your loan servicer has already set your monthly payments. This is definitely going to help you if money is tight while you need to lower your payments or if you want to pay off your loan faster than before.

It is important to understand what is available with all the repayment plan options as well as with those that share the same similarities with one another. By so doing, you can make the right choice that best suits your needs.


When it comes to repaying federal student loans, you may be out of luck if you took out private student loans too. However, several repayment plan options can be obtained from many private loan servicers. To this end, there is no harm in asking. Also note that with these plans, you are not required to lower your interest rate. You will need to consider private student loans if you want to refinance a student loan to a lower rate. Here are some options to take a look at

Standard Repayment Plan

When setting your monthly payment amounts, you should know that it is the 10-year repayment plan that was most likely defaulted to by your loan servicer. This plan which is set up to repay the loan in 10 years requires you to pay a set amount each month. Your standard repayment plan payback time can take about 30 years if multiple loans are consolidated into one large unit. However, this depends majorly on your consolidated loan amount and terms.

Refinance Loans

Refinancing refers to the act of finding replacement for multiple student loans with a single, new, private loan. Whether it is a private loan, federal loan or a combination of the two, these loans can be replaces by a single loan (private). To get a better rate, you can use a co-signer, however, when it comes to determining your new interest rate, your credit score will be heavily weighed by your lender.

Student Loan Consolidation

This is a smart option to follow if you are looking to combine your federal student loans into a single direct consolidation loan. Instead of paying separate bills to different services, you can apply for student loan consolidation which deals with having a single monthly payment to keep track of.

Unlike refinance loans, the government pays of the loans when you consolidate your federal loans while ensuring that they are being replaced with a direct consolidation loan. Based on your total federal loan balance, a new repayment schedule will be assigned to you by the government after applying for consolidation.