Brendan Sanford 
Repayment plans vary, each offering distinct advantages and drawbacks. Spending some time considering which option best fits into your financial goals can be critical.
Altering your repayment plan can save money and keep up with debt payments more easily, yet must also take into account its potential negative effect on both your credit score and ability to qualify for mortgage financing.
Pay More Than the Minimum
Paying more than the minimum on student loans will shorten their life, decreasing total interest payments and improving your debt-to-income ratio, opening doors to future financial benefits like lower mortgage and auto rates.
Unexpected windfalls like tax refunds, financial gifts or bonuses can be used to make extra payments on student loans; just be sure to indicate at the time of payment that it should go toward principal balance. It may also help to set a biweekly payment schedule to better balance out your budget throughout the month.
Keep in mind that paying back student loans should only be one of your many financial priorities. Building an emergency savings fund and saving for home downpayment and retirement should also be priorities, and overspending on student loan payments could detract from these other goals. Re-examining your strategy if overpaying on student loans hinders other goals is necessary.
Get an Interest Rate Reduction
Interest can quickly add up when borrowing money, so finding ways to lower the rate and save money over time is critical. Here are a few strategies for doing just that:
Make extra payments or prepay loans; both can drastically lower your interest rate over time, especially with standard 10-year repayment plans. Just be sure to notify your servicer of this decision so they apply the extra amount toward principal rather than interest charges.
Consider using a repayment plan that utilizes your income as the basis of monthly payment calculations, such as PAYE, SAVE, IBR or ICR plans to help lower monthly payments and may qualify you for loan forgiveness. These repayment plans aim to minimize monthly expenses as much as possible while potentially qualifying you for loan forgiveness programs.
Refinancing private student loans with lenders who provide competitive interest rates could save money and time by lowering your rate, with proceeds from your new loan used towards repaying old student debt. But remember, refinancing has fees and can take some time!
Refinance Your Loans
Refinancing can help consolidate multiple loans into one bill with one monthly payment and possibly lower interest rates since private lenders offer various loan options based on credit and income. It’s important to keep in mind, though, that refinancing federal loans into private ones forfeits certain federal protections such as income-driven repayment plans and forbearance options.
Refinancing can also allow you to shorten your loan term, potentially leading to lower monthly payments. Just keep in mind that stretching out repayment can result in additional interest costs over time.
Refinancing loans may help improve your debt-to-income ratio, making it easier to qualify for other forms of funding such as mortgages or credit cards in the future. When considering refinancing options from different lenders such as NerdWallet or Credible.
Make Additional Payments
Paying more than the minimum will lower both interest rate and amount needed to repay a loan more quickly. Extra payments can be directed toward the principal of loans by notifying your servicer via online, telephone, or written instruction – be sure to direct them toward those with small balances or highest rates; otherwise they could simply apply them towards next month’s bill instead of helping you achieve your goal sooner.
The snowball method, in which you pay off one loan before moving on to another, may provide a sense of achievement that motivates you. But taking on loans according to their interest rates could save more money over time.
Careful consideration must be given when paying off student loans early; doing so could impede your other financial goals, like saving for retirement or building an emergency fund.
