If you are a recent graduate and have to repay student loan, you can follow certain tips so that the debt doesn’t become a burden on your shoulders.
Tips for recent graduates about student loans
In case you have graduated recently with student loan, the following tips might be of great help to you. In addition to ensuring that you don’t have to pay extra interest costs and fees, these tips help you to keep your credit history clean and remain eligible for further financial assistance.
The first of these tips involves knowledge about your student loan. In the case of each loan, you must have a clear idea about your lender, your loan balance, and the repayment status of your loan. This will help you to choose appropriate ways for repayment, forgiveness, and discounts. You can also log on to www.nslds.ed.gov
Grace period means the period between the time you leave your institution and the scheduled date of your first repayment. You must know about it as there are different grace periods for different loans
Appropriate repayment option
The third of the student loan tips asks you to choose the appropriate repayment option. If you have taken federal loans, your loan payments will follow a standard 10-year repayment plan if you don’t specify otherwise. If it proves difficult for you, you can choose from available deferments as well as other repayment plans and options, such as graduated and extended payments. The former starts out low and rises every two years, while the latter prolongs the repayment period, making you pay less each month but with more in interest in the long run. Make sure that you don’t lose contact with your lender at any time. Inform your lender if you change your address or phone number. If a lender cannot find you according to your information, it might adversely hit your repayment status. Never ignore any bills or serious problems.
No need to panic, options are there
You should not panic if you have problems in making repayments due to some reasons. You can always ask your lender for deferment and interest will only accrue on your unsubsidized loans. You can also use forbearance to temporarily halt or reduce payments.
Default at your own peril
Try not to default on your student loan as it may have a negative effect on your credit report. Among other troubles, you’ll lose eligibility for federal education loans and grants. If you are in a position to pay more than your due monthly amount, you can reduce your principal balance. This, in turn, reduces the amount of interest payable by you. You may write to your lender to this effect. Avoid a student loan default
at all costs.
Begin with repaying the loan that carries the highest interest rate. If you have both private and federal loans, pay off the private loans first as they often have higher interest rates.
You may also go for student loan consolidation or loan forgiveness, but only after carefully analyzing the situation.
These tips won’t allow student loans to get on top of you.