NEW YORK (MainStreet) — It's the Christmas gift almost as good as money under the tree: a break on your student loan. Wells Fargo and Discover have announced loan modification programs that could reduce your monthly payment significantly. If you have a private student loan with either of these lenders, you'll want to apply as soon as possible.

The Wells Fargo program, offered in a test program earlier this year, reduced loan payments by as much as 31%. Borrowers need to prove eligibility of hardship by providing their W2 or a paystub, and be late on payments by no more than 130 days – though you do not need to be behind in your payments to qualify. The new terms could not only reduce your interest rate, but in February the lender will also offer extensions to payment terms by as much as five years.

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Wells Fargo holds nearly $12 billion in student loans and the Washington Postreports that officials estimate anywhere from 600 to 1,000 borrowers will take advantage of the program.

"We started to hear more and more feedback from our customers that solutions that we had for them in the past weren't working enough for them because of the tough economic times for students coming out of the financial crisis, so that's what stepped up our priority," John Rasmussen, head of education financial services at Wells Fargo, told CNBC.

Applications will be reviewed on an individual case-by-case basis to determine eligibility for either short- or long-term loan modification, the lender says. "If eligible, Wells Fargo will lower the customer’s interest rate to achieve a student loan payment that is determined to be affordable based on the customer’s income level," the bank said in a release.

Meanwhile, Discover Financial Services, with a portfolio of over $8 billion in student loans, is also working on its own modification program, expected to be in place by early next year. Even better, this student loan adjustment includes not only lower interest rates -- but the possible forgiveness of some debt.

--Hal M. Bundrick is a Certified Financial Planner and contributor to MainStreet. Follow him on Twitter: @HalMBundrick

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