How to negotiate and pay off student loans fast – Smart options

If the burden of your huge student loan debt is increasing your financial fear, then you should find a solid debt repayment option to become debt-free

Well, there are many student loan repayment options available. You need to choose the right option based on your income and the type of student loan you have taken out.

If you have private student loans, then there are certain options you have to repay them. Also, if you have federal student loan debt, then there are some federal student loan repayment options for you. So, let us discuss every option available out there so that you can have a detailed idea about paying student loan debt.

How to pay off student loans fast

Usually, students take out federal student loans to fund their education cost. On the other hand, some students take out both private and federal student loans to manage their studies.

Options for paying off federal student loan debt

The Federal government has planned out various repayment options for the borrowers.

There are many repayment plans that can help students to repay their Federal student loan.

Check out some of the repayment plans below:

Standard loan repayment plan

In Standard repayment, you can repay your debts during a debt payoff term of 10 years. You need to repay the debt with up to 120 monthly fixed payments. If you have Direct Subsidized and Unsubsidized Loans, PLUS Loans, and Direct Consolidation Loans, you can repay them by making $50 every month.

Extended repayment option

As the name suggests, you can repay your debts over an extended period of time. In an extended repayment option, you can repay your debts in 25 years.

Graduated repayment option

In the graduated repayment option, you can make payments for 12 to 30 years. This plan lowers the monthly loan payments. This option is ideal for the people who have less income.

Income driven repayment option

This repayment option has been designed keeping the low income borrowers in mind. This repayment option is based on the borrower’s income. It provides 4 types of repayment options like:

  1. Revised Pay As You Earn Repayment Plan (REPAYE Plan)
  2. Pay As You Earn Repayment Plan (PAYE Plan)
  3. Income-Based Repayment Plan (IBR Plan)
  4. Income-Contingent Repayment Plan (ICR Plan)

The Federal direct consolidation loan

You can consolidate your federal student loan with a student loan debt consolidation loan. By doing so, you can combine your numerous existing student loans into one loan that has a fixed-
interest rate. However, you can consolidate your federal student loan by taking out the federal sponsored loans, which have their own terms and repayment option.

Options for paying off private student loan debt

If you have multiple private student loan debts, then you can repay them in many ways. You can consolidate your student loan debts to repay them. In consolidation, you can merge other debts as well. Apart from consolidation, you can settle your debts as well.

Here are some important things to understand to pay off your private student loan debts.

Determine your total debt

First, you should determine how much debt you owe. Determining the total debt you owe is important to understand where you stand, what will be the repayment strategy. Also, it helps to calculate the interest rate that you’re supposed to pay.

Take out a consolidation loan

If you’re looking forward to paying off your student loans in easy and affordable monthly payments, you can take a private consolidation loan to consolidate all your private student loans. Make sure the interest rate of the consolidation loan is low and affordable.

Make payments on time

While you’re taking a debt consolidation loan to consolidate all your educational loans, make sure you do not default on your loans or become delinquent. If you do not make the payments on your consolidation loan, you may hurt your credit score terribly.

Settle your private student loan debts

You can also avail the option of settling your debts. You can negotiate with your lender to lower the total amount of debt. Also, you can enroll in a debt settlement program for settling your debts.

Is it smart to consolidate your student loan debts?

You can think why should you consolidate your student loan debts? Is it a smart decision? Well, consolidating student loan debt depends on the debt situation you are in and your income. If you think that your financial situation is going to improve in a few months, then debt consolidation might be one of your best debt solutions.

Here’s how can debt consolidation help you to repay your student loans:

Lower interest rates

The interest rates on the debt consolidation loan will be much lower than what you were paying on the student loans. As the interest rates will be lower, you can easily repay your student loans in small and affordable monthly payments without having to fall back on all the other debt obligations that you have in a month.

Longer repayment term

As the students usually live on a fixed income, they usually look for ways to repay the debt in small monthly payments. Through a debt consolidation loan, they will get the chance of repaying the debt throughout an extended period of time, thereby saving money every month.

Single monthly installment

If you are unable to remember multiple due dates, you can replace them with a single monthly payment through the student debt consolidation loan. You just have to make a single payment to the loan and forget the hassles of remembering multiple due dates.

Boosts your credit score

If you can make timely payments on your debt consolidation loan, you can easily boost your credit score. Initially, when you make the decision of consolidating your debts through a loan, you might hurt your score but soon as you start making the monthly payments on time, your score improves. Read more from here.

How can you negotiate a payoff plan on student loans?

Yes, you can negotiate with your lenders for an easy payoff plan on your student loans. However, to do so, you need to talk to your lenders.

Ask for an extended payment plan

If you are facing financial hardship for a time being, you can request your lenders to extend the payment time so that you can avoid the missed payment charge. Talk to your lenders and request them for approving the extended payment plan.

Settle your student loans

If you can’t afford to repay the total student loan debt that you owe, then you can consider a settlement option. In debt settlement, you need to pay a reduced amount of debt. However, to do so, you have to convince your lenders for the settlement. So, you need to contact your lenders to negotiate a lower amount of debts that you can repay. If the lenders don’t agree to your proposal, then you have to repay the full amount of debt that you owe.

Enroll with a debt settlement company

Since the negotiation part in a settlement process is quite tricky, many borrowers enroll with a debt settlement company to make it done. Once you enroll in a debt settlement program, the negotiator will start negotiating with your lender for a low amount of debt.

In a debt settlement program, all your extra charges and late fees can also be waived off. A repayment plan is decided on and your creditors are made aware of that.

File bankruptcy

Though all the student loans can’t be discharged through bankruptcy, yet there are some people who still make this drastic decision. Avoid making such decisions as this will trash your credit score and jeopardize your chances of grabbing a new job.

What happens if you never pay off your student loans?

Not paying student loans is the worst financial move that you could ever make.

Here’s what happens when you don’t pay off your student loans.

The loan goes into delinquent

If you stop making payments, then after 90 days, the lender will report the delinquency to the credit bureaus. This will affect your credit rating. Your new loan application may be denied or will be approved with the highest interest rate because you will be considered as a risky borrower.

The Account is ‘In Default’

If you don’t make payment for 270 days, then officially your loan goes into default. Your loans can be transferred to the student loan collection agencies.

What happens if you default on your student loan?

The consequences of getting default on your student loan can be bad for your financial health.

Here’s what happens when you default on your student loan.

  • Your loan and its interest becomes due and payable
  • You will not be able to become eligible for programs, like student loan forgiveness, forbearance, deferment, and changing repayment plans
  • You will not be eligible for additional financial aid
  • Your loan will be reported to the 3 credit bureaus as delinquent
  • Defaulting on loans can hurt your credit score
  • Your wage can be garnished to repay the debt
  • Your lender can send the loans to the collection agencies for collection.
  • You could have your tax return, social security and federal payments garnished.

Do student loans go away after 7 years?

If you default on your student loans and they are reported to the credit bureaus, the listing will not disappear after 7 years. However, it depends on the type of your loan.

The statute of limitations applies if the loan you have taken is a private student loan. The SOL is usually 3 to10 years. Once the SOL period has passed, legally, you are not liable to repay the debts.

Once you default on your student loans, it is recorded in your credit report. After 7 years passed, the negative listing will be removed.

Does student loans affect stimulus check?

The Federal Reserve has decided to keep short-term interest rates (nearly zero) keeping the bad economy amidst coronavirus pandemic in mind. So, people who are taking out Federal student loans can expect low and fixed interest rates. And the people who have already borrowed Federal student loans don’t need to make payments because Congress has suspended payments from April 2020 and interest through the Federal Student Economic Security Act (CARES) Act. Borrowers who have already taken out federal student loans can avoid making payments. But the Cares Act is going to end on September 30. And again the borrowers are entitled to make their payments.

But keeping the pandemic and economic conditions in account, a number of Acts have been passed by the Congress.

Here you go:


The USA Govt. approved the HEROES Act coronavirus relief packages in May 2020. It extends the CARES Act’s for an additional 12 months.

It also extends FFEL-program federal student loans and federal Perkins loans. This ACT provides $10,000 in federal and private student loan forgiveness to borrowers who are facing financial hardship.


It has its own stimulus proposal. It simplifies the HEROES Act. This plan is similar to an income-driven repayment option.

On the other hand, people are also worried about their stimulus check. According to the CARES Act, people of America are entitled to receive stimulus payments of up to $1,200. Since they have student loan debt, they are worried about how their stimulus checks can impact their student loans. Some people fear that the lenders could seize their stimulus payment to repay their student loan.

Will your wages or stimulus check be garnished for a student loan?

The government will not garnish your stimulus check for your delinquent federal student loans. If you are facing financial hardship due to this pandemic, you can contact lenders for forbearance or deferment options.

But, in the case of private student loans, it will not be discharged after the death of the borrowers. Private loan debts will be paid off the same way as other unsecured debts. The debt falls under the estate settlement process (also called probate). However, the estate settlement rule varies by state. Know more from here.

Is it better to settle student loans or pay in full?

It is always better to repay your student loan debts in full. If you settle your debts, your account will be reported to the credit bureaus as “settled”, This can have a negative effect on your credit score.

Does consolidating student loans affect your credit?

Student loan debt consolidation can affect your credit both positively and negatively depending on how you can manage the loan.

In federal student loan consolidation, credit scores don’t get hurt since you are repaying the debt in full.

If you take out a consolidation loan to repay your private student loan and again default on the new loan, then it can affect your credit health severely.

But, paying off student loans by enrolling into a debt consolidation loan is always better. Because,

  • Once you enroll in a debt consolidation loan, it makes your payment more affordable.
  • Your debts are eliminated after completing the consolidation program successfully.
  • The account status will show as “paid in full” after you have cleared all your dues.
  • You add positive information on your credit report at various times.
  • Gradually, your credit ratings improve.

Overall, if you consolidate your student loan debts, your credit score will not suffer.

Lastly, debt consolidation can be a good option to repay your federal and private student loan debts. If you are still not sure where to start to repay your student loans, you can consult with a CFA for help. It is always recommended to consider a student loan planner to help you put together a solid payoff plan for your student loan deb

author Valentina Wilson profile pic

By bestdebtconsolidation_admin on September 24, 2020

Valentina Wilson is a writer and blogger who specializes in personal finance and positive change and associated with BestDebtConsolidation. She has a master’s degree in financial journalism and seven years of experience in personal banking and believes that small behavioral changes are the key to achieving financial freedom.

Follow her on Twitter: @valentinailson