If you have a student loan, you know you’ll need to pay it back at some point. Maybe you’re out of college, and you’ve joined the workforce. If so, you’ll want to pay back that loan as soon as you can since that means one less financial obligation.

Perhaps you’re wondering if there are ways to lower your loan’s interest rate. This is a possibility, and we’ll talk about three of the most popular ways to do so below.

1. Refinance

Refinancing is one way to secure a lower interest rate. A student loan payoff calculator can help you determine if this option makes sense for you. 

When you refinance, you’re trading your existing loans for a new private loan, ideally with a lower interest rate. Your new lender pays off the old loan(s) and your obligation is now to the new lender instead.

It’s sensible to pursue refinancing if you have a comfortable cash flow. In other words, you’ll need to be making enough money so that you can afford your student loan payments. However, you should also be able to afford other expenses, like rent, utilities, and food, without feeling the pinch.

If you’re thinking about refinancing, the other qualification is that you should have good or excellent credit, i.e., your FICO score is at least in the high 600s. Alternatively, you may be able to refinance with a co-signer with a great credit score. 

2. Loyalty Discounts

Not everyone is aware of this, but some lenders will give you loyalty discounts if you demonstrate that you’re genuinely trying to pay the loan back on time. Only certain lenders offer this possibility, but it’s worth looking into.

Lenders such as Wells Fargo or SoFi might only offer you discounts of fractions of a percentage point. While it may not seem like much, that discount can turn into hundreds or thousands of dollars as the years pass. 

3. Payment Automation

Payment automation is one additional option that’s worth mentioning. Many private lenders as well as the federal government offer a discount if you sign up with autopay. They want you to sign up for this option because it means you’re paying regularly, and they want to establish that precedent so that they’re paid back on time.

When you sign up for autopay, the interest rate discount might be something like 0.25%, much like with loyalty discounts. This might not seem like all that much, but it can add up as time passes.

You might hear some lenders refer to this as an ACH discount, which stands for “automated clearing house.” You can figure out whether this discount is available by contacting whatever entity issued you the loan. 

Autopay is helpful because if you set it up, it means you’re not likely to ever forget a payment. You can also change the amount you’re paying each month if you ever get a raise at work or move to a higher salaried position with a new company.

Lowering Your Interest Rate is Often Possible

If you want to lower your student loan interest rate, there’s usually a viable option that will allow you to do that, if not more than one. Refinancing will likely have the largest impact on your interest rate, however, it’s not for everyone. 

Automating your payments and looking into loyalty discounts will probably not have as significant of an impact, but both are still worth investigating. If you follow up on these leads, the chances are high that you’ll end up with lower interest payments.