How to lower your private student loan payments

While the CARES Act applies to federal student loans only, private student loan borrowers also have relief options. 

The federal Coronavirus Aid, Relief and Economic Security (CARES) Act brings financial relief for student loan borrowers, including automatic payments and a reduced rate on student loan interest. But there's a catch: those benefits only apply to eligible federal student loans. 

"Unfortunately, the CARES Act does nothing directly for private borrowers," said Tim Stobierski, founder and editor of Student Debt Warriors

The good news is there are things you can do to make managing private student loan payments (and paying for college in general) during coronavirus easier. If you're finding it more difficult to pay your private student loans because of a coronavirus-related drop in income, consider these loan options. 

Refinance student loans

Student loan refinancing involves taking out a new private loan to pay off your existing loans. There are two benefits to consider refinancing private student loan payments during coronavirus.

First, interest rates are near historic lows. If you can refinance student loans to a lower APR, that translates to more savings on student loan interest. And second, refinancing could reduce your monthly payment. 

If you're interested in student loan refinancing, remember that your credit scores play a part in determining the interest rates you'll qualify for. Consider a credit check first, then compare student loan interest rates with different private lenders. Rate-shopping marketplaces like Credible make the process a little easier by allowing you to compare offers from multiple lenders at once and determine the repayment term and total loan cost.


Keep in mind that if you don't have a lengthy credit history yet, you may need to have a cosigner to refinance student loans. But if your cosigner has excellent credit, that could help you lock in a lower interest rate. 

Don’t forget to visit Credible to research rates from different private student loan companies to ensure you save as much money as possible. Credible's resident experts have also broken down the offerings of some of the best private student loan vendors available.

8 of the best private student loans in 2020

Temporarily pause payments

One of the key provisions of the CARES Act is that it automatically pauses payments for federal student loans through September 30, 2020. While you can't take advantage of this benefit for private student loans, it's possible that your lender or loan servicer may offer something similar. 

Deferment and forbearance programs can allow you to postpone making payments for a set period of time. Many private student loan servicers have extended this type of student loan relief for borrowers affected financially by coronavirus.


"The single greatest benefit of forbearance is that you are not required to make payments for a period of time, which can be lifesaving in the event that you've lost your job or need to devote your income to other payments such as your mortgage or rent," Stobierski said. 

When considering a deferment or forbearance, be aware of how long you'll be able to take a break from making payments and how interest is treated during that period. If interest and/or fees continue to accumulate on private student loans during a deferment or forbearance, you could end up with a larger balance to repay once it's time to resume making payments. 

Ask for payment flexibility

If your private student loan servicer doesn't offer deferred repayment or forbearance, they may still be able to cut you a break in other ways or offer a flexible repayment plan. "More often than you might think, you'll find that your lender may be willing to be flexible," Stobierski said. 

For example, you may be able to have your student loan interest rate or monthly payment temporarily reduced. Some private lenders are also allowing private student loan borrowers to make interest-only payments. 

These repayment options or solutions could offer short-term relief while you explore other possibilities, such as student loan refinancing while helping you to avoid defaulting on your loans. Whatever you do, don't do nothing. 


"If you're ever confused about the terms of your loan, your options for repayment or if you worry you may not be able to make your monthly payment, you cannot ignore the problem," Stobierski said. 

Contact your loan servicer

While you may be able to apply for a deferment or forbearance for private student loans online, it's still a good idea to stay in touch with your loan servicer. They may be able to offer other options for managing private student loan payments during coronavirus. 


When talking with your loan servicer, be sure to explain the details of your financial situation and what's making it difficult to keep up with your loan payments. If you have a reasonable idea of when you'll be able to make payments again, mention that as well.