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Loan Repayment InformationRelated ArticlesStudent loans are a blessing but there is going to come a time when repayment is going to become necessary. Student loans become payable when you graduate College or if you fall below the half time enrollment requirement. If you have a Federal Stafford Loan or FFEL or Direct Loan then you have a 6month grace period where you don’t have to start paying the loan back. If you have a Federal Perkins Loan then the grace period is 9 months. This may sound great but remember that the interest rate start accruing when the loan is given. By actually taking advantage of the grace period you are adding unnecessary interest to your payments.
If you have taken out a PLUS loan then repayment starts on the date when the loan is given out. The very first payment is due 60 days from when the last loan installment was made. You can also defer payment on the PLUS loan while the student is in College but you have to be enrolled at least halftime. Once you receive your loan you will be given information about your loan and repayment. Even though you are in College, repayment of your loan on time is essential to your credit report. In some cases these student loans may be the very first line of credit you have been given. You may be given a few different payment options such as Standard, Extended, Graduated, Income Based Repayment and Income Contingent Repayment. Some loans have fixed rates on their loans; this makes it easier to know what you are going to be paying every month. The way the interest works on these loans is that it starts accruing on a daily basis not a monthly one. Some important factors that go into figuring out how much interest on a daily basis is the number of days since you made your last payment, the rate of interest you are playing, the loan balance and what the interest is on a monthly basis. If you start to have trouble repaying your loans, it is a good idea to contact the lender and see if you can change your repayment plan. Find out if you can defer your loan or seek forbearance, this is when you don’t qualify for deferment but you cannot make the loan payments on a temporary basis. The idea is to seek a solution to the problem before you go into default and this will affect your credit history for many years to come. If you fall into default you could also be sued for the money, loan payments will be garnished from any paycheck you get and even your tax refunds may be used to repay your loan. If you have more than one loan then you may qualify for loan consolidation. There are many places online or in the phone book where you can get help paying for these loans. Stay on top of these loans and if you get into trouble contact the lender right away and exercise all of your options. |
