How to Lower Student Loan Debt

Using this guide, you will learn how to lower student loan debt, and not only save money, but make repaying your loans more manageable.

Difficulty: Moderately Easy

Instructions

1. If you want to lower your student loan debt, you should start by making sure you understand what your debt currently is. Get together all of your current loans, and make a list of the current lenders, your account number, the remaining balance, and your interest rates. Separate your federal government student loans and private student loans, because if you eventually want to do a loan consolidation, these types cannot be mixed together.

2. Once you've gotten your existing loan information together, it's time to do some research. You can start by getting some professional advice regarding what your options might be. You can get information through the Department of Education's Federal Student Aid site if you do have federally issued direct student loans. Your school might also provide financial aid counseling. If you have private student loan debt, you can refer back to the original lender to see if you have any refinancing options available to you.

3. If you decide that your best choice would be to consolidate your loans, start by doing some research online. You can use the loan consolidation calculators supplied on many lender Web sites to figure out what type of interest rate and terms you could get on a loan consolidation. Then, check around with your local banks and lenders, and make appointments to discuss your situation, to find out what solutions they have to offer. Make sure that you understand all the terms and conditions of the loans solutions they give you, and pay particular attention to the interest rates. After all, if you plan to save money, your consolidated interest rate should be less than your current loan interest rates. However, for many students, one of the main purposes of consolidating student loan debt is to reduce monthly payments by only paying on one loan per month instead of many.

4. Once you have found the best loan deal, apply for the loan and wait to see if you are approved. You will then pay off all your existing student loan debt with the consolidated loan, which will probably take about a month.

Tips & Warnings

• Even after consolidating, there are ways to save more money. Prepay your loan if you have the money to do so, as long as there aren't penalties for doing so. Make sure you always make your loan payments on time, to protect your credit as well as avoid finance and late charges.