Thursday, 1 August 2013

Tips On How To Refinance Student Loans

By Rick Mulholland


Those who are looking for student loan debt relief are many, and every day, millions of Americans still continue to live with the stress of paying off loans contracted during their student days. There are many ways to get relief for student loans. You can find solutions or programs that completely eliminate the loan or reduce the interest rate on the loan. Depending on your needs, the type of loan, and your current financial situation, you can find the right program to manage your loan without experiencing any financial stress of any sort. Below are some of the options that are available for you; however, you'll need to align them with the type of loan you have in order to find the one best suited for you.

One of the options you can consider will be a payment plan for financial hardship. There are many of such plans and you can choose depending on your specific needs and the type of loan you have to pay. The Income Contingent Repayment Plan is designed to allow you to make a monthly payment based on the percentage of your current salary. You can make payments for as low as $5 and the government can cancel the remaining balance if you have not been able to pay your debt for after 25 years. The Income Sensitive Repayment Plan is available for FFEL loans and is calculated with due consideration on your annual income, the size of your family, and the total amount to be settled for the loan. If you have a Perkins Loan, you can use the Hardship Repayment Plan which allows you to pay at least $40 monthly. The school reserves the right to extend the loan to a period ten years or more especially if you are unemployed or suffer from illness.

For loans that may not be through a financial aid office, consider asking the lender for a consolidation. While there is no guarantee, a lender will want to retain business and may consider this as an option. Community banks or local banks offer great refinancing services and are interested in young people and college graduates just starting out in life. The loan officers at a local bank or credit union will be available to meet and talk about refinancing loans locally. They will either be able to help or offer further guidance. This expertise is invaluable, so take advantage of local banks.

A federal program that may also be an asset is the US Department of Education's Direct Loan Program. Direct Loans are funded by the USDE through schools and managed by a loan servicer. This program allows students to choose a repayment plan and also offers the versatility to change plans if needed. Some options with this program for students saddled with debt are to switch to a public service career where it may be possible to have a loan discharged after 10 years in public service.

If you have a Perkins Student Loan, you can also apply for loan cancellation. This loan is streamlined to offer the best loan solution to those in low-income schools and educational service agencies. You can use the hardship repayment plan for a Perkins Loan. This plan allows you to pay just $40 every month for the loan, and the school can extend the period of payment to 10 years and more, especially if you experience specific hardships like illness. You can also get loan cancellation if you suffer from poor health or other hardships. There are situations where the lender can completely cancel the loan: if the school closed down while you were there or if the school offered false certification.

If you didn't attend the school and the school still owed you money for any reason, you may apply for loan cancellation as well. If there was false certification from the part of the school, you can also request for loan cancellation. The above are some of the ways to find help with student loan debt that you can consider.




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