Avoid reducing student loan payments when …
1. You can pay your current payments.
Although, obviously, there are some people who need such help, and some do not. But they may still be eligible for these preferential student loan repayment options.
The real problem with these repayment plans, such as revenue repayment? You will pay more interest and make more general payments as you repay your debt. It’s simple – anytime you reduce payments without lowering the interest rate, you will get more interest.
This case should also be considered with the following.
2. You will most likely not benefit from forgiveness at the expense of a federal student loan.
I saw how many people were delighted with the forgiveness of borrowers. The idea is that you make payments for 20 years, and after that, the remaining balance on the loan is forgiven. The problem is that depending on how much debt you have, there may not be so much forgiveness.
Let’s look at the previous scenario for forgiveness again (balance $ 34,722 with a percentage of 3.9%).
This time, we assume that your adjusted gross income starts at $ 30,000 (not $ 20,000). Run the numbers in the Repayment Estimate again, and you will find that you will not have a debt that can be forgiven in accordance with Pay As You Earn.
Instead, you pay a total of $ 54,329 to pay off your loans. This is about $ 12,000 more than if you repaid your loans with a standard repayment plan (totaling $ 41,988).
Learn more : Corinthian colleges Student Loan Forgiveness
In this case, an attempt to obtain forgiveness is a decision that loses money.
3. You are waiting for external assistance from the government
You have probably heard about the possibility that the government will help you refinance loans. Senator Elizabeth Warren’s proposal includes reducing all interest rates on federal student loans to the current lowest rate.
Although it sounds great, do not hold your breath. Congress has shown little willingness to pass this or any other bill, so you are limited to current repayment options and interest rates in the foreseeable future.
What do you think? If you reduce student loan payments or not?
For more information : https://studentloansresolved.com/