Private student loan repayment plans differ from federal student loan repayment plans. Unfortunately, there are not as many options with private student loans for repayment as there is with federal student loans.

Private loans are not eligible for income-driven repayment plans because they are not federally regulated. Because private lenders are under no legal obligation to provide any form of debt relief to their borrowers, income-driven repayment plans are not offered by most lenders. 

This is unfortunate because income-driven repayment plans, which adjust your payments to fit your income, can make paying back student debt much more manageable. 

Fortunately, income-based repayment plans are not the only option available and those unable to make high monthly payments on their private student loans, either during school or post-graduation, might still be able to find a program that works for them.

Private Student Loan Repayment Plans

Most private loans require payments to be made on them while you are in school or immediately after you graduate. When you are still a student, there are generally three plans to choose from: interest or interest-only, fixed, and deferred repayment.

Many private lenders offer an interest-only repayment plan, which requires you to pay off only the interest your loan is accruing when you are still a student. This can be the full interest amount or just a portion of it, depending on the lender. 

Fixed repayment requires you to make fixed monthly payments while still in school. Deferred repayment is an option for anyone unable to make payments during college. 

So what do you do when you’re no longer a student but need help making repayments? Once you’ve graduated, there are a number of repayment programs offered by private lenders meant to accommodate extenuating circumstances and financial difficulty as you transition from college to career.  

You might qualify for deferment if you are an active-duty military service member or intern or you might be able to switch to a graduated repayment period that lets you make smaller payments at first. 

At the very least, you might be able to apply for forbearance—a temporary pause on payments—if are struggling to stay on top of your debt. This can prevent your loan from becoming delinquent and your credit from being badly hurt by excessive late payments. Interest will continue to accrue.

Refinancing high-interest private student loans could lower your interest rate, saving money overall. Refinancing federal student loans means a loss in many irreplaceable benefits – potential for loan forgiveness, income-based payments, and generous deferment options. Consider the pros and cons and if it’s right for your private loans.