If you’re facing some financial hurdles and need help paying student loan debt, you’re in the right place. Not only because we can set you up with excellent lenders and rates – that’s not a problem pending credit – but because you are being proactive in trying to address the situation. Believe me I know… I’ve held and paid off a variety of student loans and have successfully refinanced others and paid those off as well.
I’m not kidding – an undergraduate degree from a private university and 2 graduate degrees – also from private universities. There was nothing worse than paying on what seemed to be an endless mountain of debt. I refinanced to make the monthly payments more affordable and ultimately paid it all off… And you can and will too. I mean, we really don’t have a choice, right???
I mean, you might have a choice but defaulting is a bad option. It wrecks your credit and lenders come after you. Even a bankruptcy will likely not protect you from your student loan creditors. I say likely because I have heard that it is technically possible but not readily available as with ordinary personal debts…. And bankruptcy sucks too, by the way.
I know… I’ve been there. If you’ve read my sob story in the Loan Camel’s About Us page, you’ll understand that I once walked into a bankruptcy attorney’s office with credit scores in the mid 700’s and a perfect payment record and did a Chapter 13 bankruptcy – the reorganization of debts type. Had I understood the loans available to me then, as I do now, I never would have gone there.
Really… I was divorce debt broke but making a 6 figure income and had very good credit. I just didn’t know better. And I’m a lawyer, dammit! But I didn’t know that area of the law and most lawyers don’t work in the world of personal debt refinancing and student loan refinancing. They do what they know how to do, the way they’re trained to do it.
But that’s OK, I know better now and I redeem myself everyday by helping others fall into the hole I found myself in. I see credit scores in the 800’s and I have been successful using a variety of different loans, both student and personal, to move myself up and over the hump. I suffered so you don’t have to. But if you can avoid it… please do so. The inability to rent an apartment, impact to job applications, needed loan sources – there’s a price to pay.
And please note that you can check out excellent student loan refinancing rates through our credit union and local bank network of community lenders anytime here.
So you have 2 different types of loans out there and this is important to pay attention to – take it from the ADHD guy talking here, listen up. Federal Student Loans & Private Student Loans. You can refinance both in looking for help paying student loan debt but you need to be careful, particularly with the federal student loans.
Federal student loans, as written about in Private Student College Loans – Bridging the Gap Between School Costs & Federal Loans, Grants & Scholarships, come with certain benefit when you take them out. They typically have great flexibility in terms of payments and down the line they provide options with student loan forgiveness programs and
Income-driven repayment plans which base monthly payment amounts on your income.
The problem with refinancing federal loans is that once you do so you lose these potential benefits. You have to decide whether or not you want to keep these benefits. Either way, federal loans generally aren’t enough to cover all of you college funding needs so you are likely to already have private student loans as well.
So we are mostly talking about private student loans because those are most often refinanced, without other consequences to consider and if you want to include federal loans in your student loan refinancing then that is ok too… just know the consequences and make certain that the loss of those privilages is acceptable to you. If not, then exclude your federal loans.
First things first, you need to have an idea of what your monthly expenses are and how much money you earn in a month. A personal budget goes a long way in helping you do the preliminary work to set up your loan. It also can be a great help for you in managing your budget.
Dave Ramsey, the personal finance expert, has a free budgeting tool called Every Dollar, which is an excellent tool and app for tracking and managing your monthly expenditures. This is important to get a hold around because you are going to want to know where you need your new student loan payment be after you refinance your student loans.
Assume that you currently have a $50,000.00 loan balance outstanding with 9 years left at an 8% interest rate and your payment is $651.00 per month. Refinancing that loan to stay at 9 years at a 4% rate will drop your payment by $99.00 per month but you can also drop it a lot more. Push that loan term out from 9 to 15 years and your monthly payment will go from $651.00 to $282 per month – close to $369.00 less per month. If that will help you then you already know what to do… and you can do that here on our Student Loan Refinancing page.
There are also differences in rate types with variable interest rate loans having the lowest rates but they are not locked in for the loan term like fixed interest rate loans. For more on choosing between fixed and variable rate loans you can read up on that in Private Student Loan Refinance Options – Choosing Between Fixed & Variable Interest Rate Loans.
You can take out student loan refinancing with no fees which means no debt will be added to your debt. Lenders will generally want to see that you have been making payments on time on your student loans for a minimum of 12 months. They also want credit scores in the mid 600’s and up.
If you are not strong credit-wise, a qualified co-signor can help you get a better rate but please not that they will be on the hook for your loan should you default. That said, many lenders have co-signor release provisions after 24-36 months of payments. You also have the option to refinance a co-signor out of a loan if your credit gets strong enough to support that.
What we have learned is that there are ways around student loan debt despair which do not involve defaulting on your loans and which do provide you with help paying student loan debts. Understanding the difference in consequences between federal and private student loans, refinancing your student loans can help you get over the large monthly student loan debt monster you worry about via lower rates and more favorable payout terms.
Financial stress is a terrible thing… I feel your pain… but there are ways to make it more manageable. I did it and so can you. Just know what your income and expenses are, plan your budget and then decide where you need your loan payment to be and take it from there. Our lenders are excellent. They are credit unions and local community banks known to have some of the best rates out there – starting at 1.9%. They look to lend to people with ties to their areas/purpose and their business models are more local and community-geared in nature than the monster banks – You got this!
If you are interested in checking out your potential rates and savings through the refinancing of your student loans then the Loan Camel can help you get over the hump by looking at your Student Loan Refinancing options here.