Sneak Peek: 5 Takeaways From the Torch Student Debt E-BookAugust 13, 2020
In the United States, over 45 million people are dealing with student loan debt. And it’s not just a problem for millennials and Generation Z. In fact, the number of people over 60 with student loan debt has quadrupled since 2010.
By Kat Tretina
If you’re looking for help with your loans, you may be overwhelmed by the amount of information out there and may not know what sources are legitimate.
Torch Student Debt is a free eBook from Education Loan Finance, a company with an A+ rating with the Better Business Bureau and a 4.9 TrustScore on TrustPilot based on over 1,100 customer reviews. It’s a comprehensive guide on accelerating your debt repayment, saving money, and reducing your monthly payments.
Here’s a sneak peek into five key tips from the book.
1. If you have federal loans, a Standard Repayment Plan is the most cost-effective repayment option
If you have federal student loans, the default repayment plan the government assigns you to is a 10-year Standard Repayment Plan. After your grace period — the six months after graduation where you don’t have to make payments — you’ll make full interest and principal payments and pay off your loans within 10 years.
While you can extend your federal repayment plan to 20 to 25 years to get a smaller monthly payment, doing so will likely cause you to pay more in interest charges over time.
If you can afford it, stick to a 10-year plan. You’ll pay off your loans sooner, and you’ll pay less money in interest charges.
2. If you can’t afford your payments, you can switch to an income-driven repayment (IDR) plan
If you have federal loans and can’t afford your monthly payments under a Standard Repayment Plan, you can lower your monthly payments by switching to an IDR plan. Under an IDR plan, the government bases your payments on your discretionary income and family size, and you could potentially qualify for a much lower monthly payment. Some borrowers even qualify for $0 payments, meaning you don’t have to make any payment at all, and you still stay current on your loans.
There are four IDR plans to choose from:
- Income-Based Repayment:
- Income-Contingent Repayment
- Pay As You Earn
- Revised Pay As You Earn
3. Depending on where you work, you may qualify for loan forgiveness
Public Service Loan Forgiveness is a government program for federal loan borrowers. If you work for the federal, state, or local government or a non-profit organization, you can qualify for loan forgiveness after working full-time for 10 years while making 120 qualifying monthly payments under an IDR plan. The government forgives your balance tax-free, so you don’t have to pay income taxes on the discharged loan amount.
4. Student loan refinancing can supercharge your debt repayment
If you want to get rid of your debt as quickly as possible, student loan refinancing is a powerful tool. When you refinance, you can get a lower interest rate and combine your loans into one. It’s a smart strategy if you have good credit and steady income and can qualify for a lower rate, and you don’t intend to pursue PSLF or an IDR plan.
Education Loan Finance customers reported that they are saving an average of $214 every month or will see an average of $18,699 in total savings after refinancing their student loans with ELFI.1 To see how much you can save by refinancing your student loans, use the student loan refinance calculator.*
Once you’re ready to refinance your loans, you can get a personalized rate quote from ELFI online without affecting your credit score.*
ELFI offers competitive interest rates, and you can decide between fixed and variable-rate loans. Fixed rates have the same rate for the entire repayment period, so your interest rate and monthly payment never change, giving you security and peace of mind. By contrast, variable rates tend to start off quite low. Over time, they can fluctuate along with the LIBOR rate and cause your payment to increase. Some people opt for a variable rate to use the lower initial rate to pay off their debt more quickly.
ELFI has loan terms* between five and 20 years in length. You have the flexibility of choosing your own loan term to match your budget and financial goals. In general, the shorter the loan term, the lower your interest will be. And, while your monthly payment will be higher with a shorter loan term, you’ll pay much less in interest charges and pay off your loans faster.
ELFI’s Student Loan Refinancing Rates and Terms:
Variable Rates: 2.39% APR*
Fixed Rates: 2.58% APR*
Loan Terms: 5, 7, 10, 15, and 20 years
Loan Amount: $15,000 and up
5. You can connect with ELFI’s personal loan advisors for personalized support
Student loans can be complicated, and you may have questions about how to handle your loans best.
ELFI is well-known for its customer service, and it offers a unique feature: Personal Loan Advisors. When you contact ELFI, a Personal Loan Advisor will be assigned to you and work with you every step of the way to ensure your loan is the perfect fit for your needs.
ELFI’s advisors are available via text, email, or phone. Your advisor will help you understand the pros and cons of refinancing, choose the best repayment term and interest rate type for your needs, and answer any questions you may have.
Repaying your student loans
There is a lot of student loan advice out there, and a lot of it is confusing. Weeding through all of the available information can be frustrating and overwhelming. Instead of handling all of it on your own, you can learn about your legitimate student loan repayment options by downloading your free copy of Torch Student Debt.
*Education Loan Finance is a nationwide student loan debt consolidation and refinance program offered by Tennessee based SouthEast Bank. ELFI is designed to assist borrowers through consolidating and refinancing loans into one single loan that effectively lowers your cost of education debt and/or makes repayment very simple. Subject to credit approval. See Terms & Conditions. Interest rates current as of 07-17-2020. The interest rate and monthly payment for a variable rate loan may increase after closing, but will never exceed 9.95% APR. Interest rates may be different from the rates shown above and will be based on the term of your loan, your financial history, and other factors, including your cosigner’s (if any) financial history. See Eligibility Requirements for more information. For example, a 10-year loan with a fixed rate of 6% would have 120 payments of $11.10 per $1,000 borrowed. Rates are subject to change.
1Average savings calculations are based on information provided by SouthEast Bank/ Education Loan Finance customers who refinanced their student loans between 12/25/2020 and 1/31/2021. While these amounts represent reported average amounts saved, actual amounts saved will vary depending upon a number of factors.
Notice About Third Party Websites: Education Loan Finance by SouthEast Bank is not responsible for and has no control over the subject matter, content, information, or graphics of the websites that have links here. The portal and news features are being provided by an outside source – the bank is not responsible for the content. Please contact us with any concerns or comments.