Author: Ashley Eneriz / Source: Wise Bread
While your private student loan seemed like a good idea when you were pursuing a degree, now it might feel like an unbearable weight — especially if you didn’t get the job or paycheck you were hoping for after graduation. If you are struggling to pay your student loans, know that you are not alone: American grads share over $1.
48 trillion in student loan debt, with a delinquency rate of 11.2 percent.Private student loans add an extra layer of difficulty for borrowers. While federal student loans offer various repayment programs to those struggling to make payments, private loans notoriously have less leeway.
Not paying back your student loans is not an option. Not only can defaulting on your student loans hurt your credit score, but it can eventually lead to calls from collection agencies and having your wages garnished. Here are several options to consider instead when you are struggling with your private student loans. (See also: What Really Happens When You Don’t Pay Your Student Loans)
1. Refinance your loans
Are you paying a lot of interest for your student loan? Get quotes from private student loan lenders to see if you can land a lower interest rate. Decreasing your interest rate by 1 percent might not save you a lot each month, but it can save you thousands over the life of your loan.
If you are really in a pinch financially, and you have exhausted your options, you can refinance your student loans to a longer term. This can dramatically decrease your monthly payment, but it will mean that you are paying more overall over the life of the loan.
Consider the long-term effects of refinancing your loan from a 10-year term to a 20-year term before finalizing that decision. (See also: Should You Refinance Your Student Loan?)2. Increase your income
Earning more at work can help ease your budget woes. However, getting a bigger paycheck is easier said than done. For employees that have been on the job for a while, ask for a raise or look for…
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