Are you a recent graduate with student debt? Well then it’s about time that you get ready to pay up your student loans as the 6 month grace period is almost over now. But don’t start panicking just yet. Instead be smart and simply plan how you are going repay the amount. It does not matter if you owe $6,000 or $60,000, make sure you have a grip on your student debt as it will enable you to manage your payments, keep them affordable, avoid fees and protect your credit rating.
Here you will find some really useful tips that will help you to pay off your education loans…read on….
Find Out How Much You Need To Pay
Most lenders will send you a mail notification which will inform you about the requisite monthly payment after your student loan gets in repayment. Such notices will most likely come from establishments like Nelnet, Great Lakes or American Education Services (AES). These are some of the prominent student loan servicers, including the middle-men firms that collect the payments from students like you and apply them to their debts.
Private lenders, including credit unions, banks and other financial companies often provide student loans, along with the federal government which utilises various servicers to control payments. You can also choose to be proactive and get in touch with your lender or simply decide to visit the clever student loan website of the Department of Education. It will allow you to check out your federal loans. In case you are still unable to locate records related to your education loan, then you should contact your own school.
According to Lauren Asher, President of the Institute for College Access & Success, a non-profit educational establishment, after you gather all the relevant information, you must prepare a list of your student loans, including repayment status, interest, balance and the lender’s name.
Learn About Your Options For Repayment
In general, the standard duration for repayment of federal loans is 10 years. However, you can get the timeline extended if you find the monthly payments too much to deal with. But you must remember that you will need to pay more interest throughout the entire duration of your student loan. Hence, reducing the monthly bill and extending the repayment timeline may not be a wise idea in the long run.
Income-Based Repayment Plan
Asher confirms that you will get more options for repayment in federal loans than private loans. If you are unable to make enough money and have taken federal loans for your study, then you can choose to get qualified for income-based repayment plan. Such plans put a cap on your monthly payments to a percentage of what you are earning. Moreover, in some instances, they also pardon any residual debt after 25 years of payments. In case you are employed in the non-profit or public sectors, then you can get qualified for loan forgiveness just after a period of 10 years of repayments.
However, you must realise that the federal income-based repayment plans are not applicable to the private loans. But there are few lenders who will let you make interest-only payments in case you are finding it difficult to repay the loan. You may also have to pay a fee for lowering your payments. This particular service is usually offered by lenders for a limited period of time.
So There You Have It…
These were some of our top tips for managing student loans and repaying them in a hassle-free way. Did we miss anything? Would you like to add some more tips? Then feel free to comment below. We would love to hear from you.