Important Student Loan Repayment Advice

By Essie Osborn


Many people go to school and use grants and loans to fund it. There are numerous resources that offer student loan repayment advice. Such information is beneficial for students, past or present, who have used loans to pay for higher education. Repayment is possible.

It is important to know what loans you have. That is, keeping track of the repayment status, balance and lender on every student loan. The details are important and can determine the best option for repayment. Those who are unsure should get in touch with their lender or reference a billing statement or other paperwork. Contacting the school might be another option for those trying to located their records.

Consider the grace periods. Each loan will have its own grace period, which is the term used to describe the amount of time students have after leaving school before their first payments are due. This period will range with all loans and so it is crucial to know when it ends so that payments are not missed.

Communicate with the lender. More specifically, whenever contact information has changed make sure to let them know in a timely manner. Major problems can occur when a lender cannot reach a borrower because of outdated information. Likewise, always read through information sent to you regarding the status of your loan. Do not avoid lenders or collection agencies when it comes to this. Most lenders are willing and able to work with borrowers.

Make sure to set up the right repayment for you. When loans are due, payments will generally be set for a 10-year plan. If making these payments is too much, there are solutions. Sometimes plans can be adjusted down the line as well. Extending the 10-year plan will lower monthly payments but add to the interest paid.

There are income-driven plans that allow borrowers to pay according to their income or earnings. This can help cap the monthly payments to a reasonable amount of the yearly income. Forgiveness might also be available, after making payments over a certain amount of time. Loans that are private do not usually allow for income-based repayment or other such federal set ups, including forgiveness, forbearance and deferment. Still, a lender might offer some solutions for people or allow borrowers to make payments on the interest only for a specified amount of time.

Lower the principal payment if you can. Make sure to keep all loan documentation in your records in case there are disputes. It is suggested that the most expensive loan be paid off in full first. Starting with the loan that has the highest rate of interest is best. If you have private and federal loans, consider paying off private first because they usually have the higher interest and lack of repayment options. Consolidation might be ideal for some people, as it combines multiple loans into one payment that is to be paid monthly and has a fixed interest.

Try not to worry. There are many repayment solutions available. Plus, avoiding these loans only causes more problems.




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