How to Pay Off College Debt
The task of paying off college debt soon after graduating is not only tedious, but also extremely intimidating. It is one of the biggest challenges faced by fresh graduates and one that can lead to a life of debt if not dealt with properly. It is essential for you to pay off your college debt as soon as possible so that it does not hinder you from achieving your long term goals like buying a beautiful house or a fancy car. At the same time, you should keep in mind that that the longer you wait, the more interest you will accumulate on your loan, inevitably causing you to pay more.
- Standard Payment. This option allows you to make monthly payments of your debt and interest within 10 years.
- Graduated Payment. This option is feasible for those students who are making a modest earning but expect their wages to increase over time. Payments for this option start off low but increase with time and are payable between 10 to 30 years.
- Income-based Payment. You can use this option if you want to make payments proportional to your income, allowing you a time frame of 15 years to pay off your debt completely.
- Long Term Payment. This option allows you to pay off your student loans (plus interest) within 30 years on the basis of a monthly payment.
- Loan Forgiveness Programs. This is an excellent option for those who are interested in pursuing a career in public service, since most public service careers provide students with the option to pay back loans in exchange for certain commitments such as enrolling in Peace Corps, AmeriCorps, or working as a teacher or in the Air Force. After all, there are a few ways by which you can defer your payment if you feel that you need more time to pay off your college debt.
- Consolidation. This option allows you to combine all your loans into one loan, which is then payable over a longer period of time but of course with increased interest payment.
- Deferment. If you feel that you need more time, then you can ask your creditors to give you some time off from payment, but it will not negate interest accumulation.
- Forbearance. This is similar to deferment as it allows you a grace period of usually three months, in which you will not be required to pay, provided you are able to show documentation of hardship.
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