One of the biggest financial goals that many people have is to get out of debt. Many Americans have taken on student loan debt to pay for college. If you’re trying to pay down student loan debt, it’s important to first determine if you can lower the interest rate. There are various ways to lower the interest rate, and financial experts can help.
- Apply For a Small Business Loan
Some people want to lower their student loan interest rates to save money. One way to accomplish this is by applying for small business loan to pay off student loans with high-interest rates. According to Lantern by SoFi, “Whether you’re just starting out or already have an established company, knowing how to apply for a business loan is vital.” A small business loan can be a great way to buy property, purchase equipment or expand your operations.
- Refinance Your Student Loans
If you have good credit, refinancing your student loans can be a great way to get a lower interest rate and smaller monthly payments. If you have a solid credit history and are working toward paying off your student loans, then you could qualify for a lower interest rate.
Due to the coronavirus pandemic, the cost of student loan refinancing has decreased significantly. Some lenders offer fixed interest rates of 2.3% and low variable interest rates. Unfortunately, if you have bad credit, you may not be able to lower your student loan interest rates as much as you would with good credit.
To improve your credit score, you should always pay on time and reduce the amount of credit card debt that you have. If you have federal student loan debts, you should carefully consider the pros and cons of refinancing. Doing so could result in you losing some of the protections that are available to federal student loan holders.
- Find Discounts
One of the easiest ways to lower your student loan interest rate is by automatically paying off your loans each month. Many lenders offer a discount if you set up an autopay account with them. If you have other accounts with a lender, then you might be able to earn loyalty discounts. These are typically offered by the lender to borrowers who have multiple accounts with the company.
- Negotiate With Lenders
If you’re already a private student loan holder and have already refinanced, then it may be possible to get a lower interest rate by shopping around for a better deal. If you have okay credit and are looking to improve your chances of a better loan deal, then you may qualify for a lower interest rate by applying with a co-signer. However, make sure that the co-signer fully understands they are responsible for the loan as well.
Lowering your student loan interest rate to save money doesn’t have to be difficult. With a little research, you will find many options available to you to consider. The key is working with lenders to find the best possible rate for your financial situation.