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What is the best plan to paying back my student loans?

Maureen S asked:

I have $33,000 in student loan debt. I am supposed to start paying SallieMae back next month at $229 a month for 25 years at 6.8% interest. To me this doesn’t seem like much of a deal! Is there a way to lower this payment and the term of the loan? Can I get a lower interest rate? What is the best plan here to pay it off quickly but not have an outrageous monthly payment?
Asked on: 2012-12-24 17:40:53

3 Comments

  1. Cat says:

    I have loans out with them too. Apparently they don’t let you consolidate loans anymore, and they told me there was no way of lowering my interest rate (also 6.8%). My sister has suggested that I take out another loan (through a bank) and use that money to pay off SallieMae. Obviously this only works if you can obtain a loan at a much lower rate than 6.8%.

    My only suggestion (and what I’m doing) is paying off as much as I can before interest starts accruing. You’ll have to budget yourself carefully, as completely wiping out yours savings doesn’t really help you and leaves you vulernable to the market and any unexpected charges that may come up.

    Good luck! And yes it does suck, and I’m sorry, I seriously feel your pain. Just work and save, and pay.

  2. trh2000_2000 says:

    When it comes to paying off debt, there is only one true answer.

    Put every penny that you can afford every month towards it. When I say every penny, I mean every penny. A penny now will save around 3 cents by the end of it all.

  3. Sallie mae has a couple of programs for federal loans that will lower your interest rates.. One they used to do is if you had your payments auto drafted out of your account they would lower your interest by a bit. They used to have another program called “Great Rewards” that would reduce your interest rates by some after you made a certain number of on time payments. 6.8% IS a good deal (as long as its a fixed interest rate) when compared with the rates of any private student loan rates and your payment is also a good deal too.

    HOWEVER, Most federal loans are put on a 10 year payment plan. I’m not sure why yours is 25 years unless your loans are not federal loans. Perhaps you read the note incorrectly?? You should get that loan put on a 10 year payment plan if you can!!! Otherwise you’ll be paying more in interest than the actual amount you borrowed!!! OUCH!

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