If you have privately held student loans, you might be feeling a little jealous right now.
However, you do have options if youre struggling to make your private student loan payments.
Federal Loans vs.
Private Loans
There is a significant difference between a federal student or parent loan and a private student loan.
7 Ways to Make Money if You Hate People
Do you avoid people too?
Enough small talk.Here are some waysto earn extra cash, without all of the social stuff.
Federal loans are also more likely to have fixed interest rates and more liberal repayment options.
There arefewer advantagesto taking out a private student loan over a federal loan for undergraduate studies.
Financial advisors suggest exhausting federal loan options first.
If a private loan is needed, shop around.
Studentaid.govwill list all federal loans, she said.
If your loan isnt on that list, then you might be assured you have a private loan.
One example that caused misunderstanding occurred during the federal loan forbearance period that started in 2020.
They qualified for the coronavirus relief bill benefits.
FFEL was a federal program that was mostly administered by state or private agencies.
So those loans didnt qualify for pandemic relief benefits.
Private Loans
And that leaves us with the commercially held private loan.
Its just not automatic.
He added that reaching out before payments are due will give you more leverage when negotiating.
Here are three options.
Forbearance
Forbearance among private lendersis offered on a lender-by-lender, case-by-case basis.
However, a private lenders terms for forbearance may not be as generous as that of the federal government.
Considerthese optionswhen attempting to pay off your student loans quicker and with less total payout.
Refinancing
In addition, federally held loans also typically offer lower interest rates compared to commercial loans.
Or you couldshop aroundfor even better rates with a new lender.
I wouldnt recommend refinancing federal loans into private loans, Law said.
Avoid this option if possible.
Refinancing is becoming more difficult to qualify for as banks begin to tighten lending.
I only want someone to refinance if they know they can fix the problem, Arkovich said.
Arkovich noted that lenders dont typically advertise this option.
In a rate reduction program, the lender will reduce your monthly payment.
That could mean your total loan cost may be higher by the end of the period.
Then when it starts accruing interest again, the balance is that much smaller.
Tiffany Wendeln Connors is the deputy editor at The Penny Hoarder.
Senior writer Robert Bruce contributed along with reporting from contributor Kent McDill.
Probably not as good as youd like.
It always seems like an uphill battle to build (and keep) a decent amount in savings.
But what if your car breaks down, or you have a sudden medical bill?
Ask one of these companies to help…
