Paying off Student Loans

paying off student loansStudent loans are designed to help students cover the costs associated with higher education. There are two main types of student loans, these being federal student loans and private student loans. Federal loans are distributed by the government, and often have lower interest rates and borrowing amounts than private loans, which are distributed through private lenders. Lenders offer many flexible student loan repayment plans, with customizable options including when repayment begins and the length of the repayment period. For example, repayment begins for some federal loans six months after graduation, while the repayment period for Perkins loans starts nine months after graduation. For private student loans, repayment may begin immediately after graduation.

About Paying off Student Loans

Paying off student loans in a timely manner should be a priority for any borrower. You must understand the amount of debt you take on, as well as the specifics of repayment. In many cases, students need to take out multiple loans to cover the cost of their education, and repaying multiple student loans can be challenging. If you do not know the exact details of your loan(s), you can miss payments, which may lead to default, which can have serious consequences for the borrower’s creditworthiness.

Key Repayment Terms You Need to Know

Refinance your student loan

Prioritize and Plan for Paying off Student Loans

Make a list of all the loans that you have to pay back and prioritize them according to their payback period. Choose a payment plan carefully at the time you are opting for a certain type of student loan. Most lenders offer monthly repayment plans with varying yearly terms, so if you cannot manage to pay during college, you may be able to defer payments until after graduation. You can also look for a loan consolidation option that allows you to pay off multiple lenders in a single payment.

How long can you wait to repay your student loan? How long should you wait?

College on the Cheap’s Street Team asked students if they can wait until after graduation to begin repaying student loans, and most of them got the question right! Think you know the answer? Check out the video.

 

Borrowing Advice