Private Loan Repayment
Private student loan options vary by lender, but are generally few and far between. This is because the Federal Trade Commission (FTC) considers private student loans as the same as most other consumer debts and do not allow lenders to substantially alter the original terms of the loan.
Generally the only option available to lower your private student loan payment is to refinance the loan. Refinancing can lower your interest rate and/or extend the term of the loan which will result in a lower monthly payment. It can also be a way to remove your co-signer from the debt. Eligibility for consolidation will depend heavily on your credit score and debt to income ratio.
Our policy is to not recommend one lender over another, but coming soon is a list of every organization we could find that offers private loan consolidation, in alphabetical order
What if You Don’t Qualify for Refinancing and Still Can’t Afford Your Payments
If there is a co-signer on your loan, they will be required to make what payments you cannot. For most private loans co-signers are equally liable for the debt so regardless of your current relationship with this co-signer, or their current financial situation, they will be called upon to fulfill the repayment obligation at this point.
Some lenders will offer you a forbearance for several months, typically three for which they will Likely charge you a small fee. While far from ideal, this is a better option than defaulting on the loan might be.
Ironically, much like the mortgage relief that was offered in the 2000’s, once the loan is in default, the lender is allowed to offer longer term lower payment options. We do not suggest you default on your loan if there are other alternatives. If you are in default however, you can contact the lender to see what options may be available to you. Note that they are not required to offer any type of relief, but often will to avoid the expense of attempting to collect or even sue you for the loan amount. Options to discuss could include temporary interest only payments, or a temporary reduction in the interest rate.