Steps to take when you can’t afford your private student loans
Updated on September 30, 2019
Many borrowers can’t afford their student loans and have no options of getting out of them. Statistics show that more than 1 million students have private loan debt amounting to $150 billion.
Private student loans don’t work the same way as federal loans, and many students fail to realize this when filling out applications. They eventually take out private loans without fully comprehending what they are getting into.
Private loans work like a mortgage where a borrower has to adhere to repayment plans set. Failure to repay according to set terms can lead to default and ultimately, litigation. Private lenders make student loan applications easy due to online applications.
Such accessibility and convenience sway many students to get education loans from private firms without careful consideration. If you can’t afford your student loan debt here are a few options you can try out.
1. See your lender’s options
You can call your private lender to see if they can help you stay current with your loans. Some private institutions provide assistance programs which assist you in complying with your lender’s repayment terms.
For instance, you can get student loan forbearance if you are unemployed or experiencing financial hardships. Forbearance allows you to postpone your loan payments for a while to avoid delinquency and default.
2. Refinance your loan
You can refinance your private student loan to get a new loan with better terms and interest rates that are affordable. Use a loan comparison website to assess what refinancing options you qualify for and which make sense for you.
Many borrowers think they can’t afford their student loans because of their minimal income. While this may be true, you can always cut down on your budget to pay your private lender.
Consider all the money you use to go out for dinners, movies, and shopping. Instead, use this money to pay off your loans. Finding additional sources of income is also a viable option to pay off student loans.
StudentLoanify can help you with your repayment plans through a free analysis. Contact us today to find out your repayment options in private student loans.