Having a loan debt hanging over your head as a student in the US is not a very pleasant situation. However, this can be easily taken care of when you know that you can make a monthly payment that will be spread over the standard 10-year period, which is how long it takes most students to pay off their debt.
To pay this on a monthly schedule, you have to determine what the annual percentage rate (APR) for the loan is, and once this has been done, you can go ahead and make a plan on how much you can pay monthly. The APR is usually capped at between 5% and 14% yearly.
How much can you pay monthly?
To determine how much will be paid monthly, you can use the information below to determine what a monthly payment for the loan of $160,000 will cost you, assuming you are making the payment at a 6% APR.
| Number of Years | APR(%) | Monthly Payment (In $) |
| 1 | 6 | 13,771 |
| 3 | 6 | 4,868 |
| 5 | 6 | 3,093 |
| 9 | 6 | 1,921 |
| 10 | 6 | 1,776 |
The payment you make monthly can either increase or decrease depending on the APR you choose, as well as the number of years you decide you will use in making your payment. For example, if you choose to pay off your loan at a 10% rate over ten years, you will pay just $2144 monthly at that rate. However, if you choose to pay off your loan at a 14% APR for five years, you will pay $3,723 monthly.
Can student loans be reduced in the US?
There is a possibility that student loan debts will be reduced. However, to achieve this, the student must have done the following:
You can switch your payment plan, as the possibility of paying off your debt early will increase your chances of seeing your loan amount reduced.
You can also explore the option of getting temporary loan relief that will come in the form of a deferment or a forbearance. Any of this can also help you in your plan to seek loan forgiveness in the future.
In addition to this, you can also explore the possibility of seeking loan forgiveness by checking if you qualify for loan forgiveness. This option can be used via the public service loan forgiveness plan.
Repaying a student loan can prove difficult for many, especially as the rising cost of living continues to grow with the rising rate of inflation. However, if you choose to use the options we have outlined, you will have made considerable progress in successfully paying your loan on or before the due date or the standard 10-year you are expected to pay off your loans.
