It is common for a lot of students to have student loans. While it may seem a tedious job to keep up with your monthly loan repayments, it is imperative to pay dutifully because it has its rewards in the long run. Here are some tips to make it more bearable.
You must know the details of your loans. Who are your lenders, how much is your balance and what is the repayments status of each loans. If you have federal loans check it on www.nslds.ed.gov to see the details, while you can check your bills and other paperworks for your private loans.
Keep in touch
If ever you moved, changed your contact number or emails, always update your lenders. Communicating with your lenders are important. Always read your mails, emails and bills. Do not miss a call from your lender. If your lenders call you, do not be afraid to answer, they are willing to help should you encounter a problem with your loan payments.
Grace period is the time span when you have to pay your first loan payment after leaving school. Federal Stafford loans requires you to pay within six months, while federal Perkins loans give nine months of grace period. Federal PLUS loans will depend on when it was issued. For private loans, contact your lender. Never miss the first or as much as possible, all your payments.
If you are still unemployed, struck by a serious health condition or other major financial troubles, do not just worry yet. Temporary postpone your federal loan payments with deferments and forbearance. However, these options are likely to increase the loan’s interest rates.
Do not skip payments
However tiresome, never ignore your loan repayments. If you don’t pay your federal loans for nine months it will lead to default, which means more debt. Your credit score will go lower, your loans will fluctuate, the government will take much of your wages, and you will lose your tax refunds. As for the private loans, the person who cosigned your loan will also go on debt. If you are having troubles paying, talk to your lender.
Your federal loans will be based on a standard 10-year repayment plan, if this will be hard to keep up with, there are other options such as extending the life loan beyond ten years, but this will make your interest payments higher. You can also choose between Income-Based Repayment and Pay As You Earn which will depend on your monthly salary. You can have loan forgiveness overtime. On the other hand private loans does not have such option. You can talk to your lender if you can pay interest-only in your dry months.
Loan Consolidation means that you merge your various loans into one repayment every month with a fixed interest rate. You can calculate and consolidate federal loans with the Direct Loan program. Do not consolidate federal loans into private, it will lose its payment options.
Prepay is paying more than the required payment for the months. This will decrease your loan interest. Remember to send a written request to your lender that you want to prepay or else the prepay will just be carried over for the next month.
Service the highest interest rate first
If you want to pay your loans in advance, choose to pay the loans with the highest interest rate first, these are usually the private loans. Federal loans have more flexible payment options.
With the Public Service Loan Forgiveness, part or all of the federal loans can be forgiven after ten years of faithful payments, provided that you work in the government, public service or nonprofit. You can see the details in at IBRinfo.org.