Flickr user Randen Pedersen
The reality most students face after they graduate, is how and when they are going to repay the student loans that they accrued of over the 4 years in college. Understanding the basics of repaying your student loans is important so you can plan accordingly. Here are a few things you absolutely must know about repaying your student loan debts.
Repayment Plans
If you do not choose a specific repayment plan, you will automatically be placed on a 10 year Standard Repayment program. This means you have to pay a fixed interest rate and 10 years to repay the amount. If you cannot afford the monthly payment on this plan you can consider moving to an income-driven repayment plan. With this plan you will pay more by way of interest but your monthly payments will be lower and the repayment time will be extended beyond 10 years.
Student Loan Forgiveness
It may be worth considering the forgiveness option. Your student debt may be forgiven if your work involves some type of public services such as teaching or nursing or if you join the military or become a firefighter.
Auto-Debit
Consider enrolling in an auto debit plan. When you do this, your monthly payments are taken out of your bank automatically so you don’t have to worry about missing any payment. Even better, many banks will give you a .25% reduction in interest rate when you make your monthly payments through an auto debit plan.
Living with student debt can be stressful but you can stop it from becoming overwhelming by understanding the basics and exploring alternative schemes that help you reduce your debt.
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