26 May Make a Plan Now for Repaying College Loans
As a recent college graduate, you will soon be faced with the prospect of repaying your college loans unless you qualify for some type of deferment. Instead of waiting under the payments start coming due, take charge of the process and make a plan now for repaying those loans.
First, sit down and figure out exactly how many student loans you have. If you only took out one loan each semester, that would be eight loans, but it could be more or less depending on your specific situation. Determine if they are federal student loans or private student loans, and find out who the servicer is for each. A servicer is a bank or company that receives your payments and answers your questions. Now you can start estimating the monthly payments on each of your loans.
• Repaying Federal Student Loans: You may be eligible for deferment if you return to school for additional courses or perform active duty military service. Your monthly payment will depend on the type of loan you received, how much money you borrowed, the interest rate on your loan, and the repayment plan you choose (standard, graduated, extended, income-based, pay as you earn, income-contingent, and income-sensitive). Use the Repayment Estimator to look at which plans you may be eligible for, and to see estimates for how much you would pay monthly and overall.
• Repaying Private Loans: Your monthly payment is based on the terms of your individual student loan with each private lender. Most have some type of payment calculator that can help you estimate the amount of your payments. As an example, take a look at the payment calculator for Discover Student Loans. You will need to know your loan amount, interest rate and repayment term to estimate a payment amount. Similar to federal loans, they also offer several deferment options and repayment assistance options. Make sure you also take advantage of their Graduation Reward.
This should give you a good idea of the total amount of student loan payments you will be making each month. This will help you in estimating how much money you will need to earn, and budgeting how much you will have available to spend on living expenses. If you have a large amount of money available you might benefit from early payment plans, like the one available at Discover Student Loans.
Does It All Sound Too Confusing?
It might seem overwhelming, but your lender, financial aid office, or a professional college financial aid advisor can be of assistance. If you have a lot of student loans, you could consider consolidation to make things a little easier on yourself. This combines several federal loans into one or several private student loans into one. Consolidation might also help you save some money on interest rates.
If you need help making a plan to repay your college loans, or need more information on the college financial aid process, contact College Financial Aid Advisors (CFAA).