How I Became An Expert on Funds

Things Every Student Must Know About Student Loans

For students who are graduating, May is a very important month. You need to think of your student loans aside from thinking your final exams and looking forward to your dream job. You’ll need to cover the costs of your student loans after you graduate as payments will begin to kick in. It is really difficult repaying multiple loans as compared to only one loan. It is really confusing thinking that you need to deal with different agencies, and sometimes you won’t even know the amount you owe and when you should need to pay. It is a good thing that this can now be simplified with a small dose of organization, and you only need to know the minimum amount of each loan and its due date so you can write it down or just create a direct debit account so the payment will just be obtained from your account.

One way to best reduce the amount of your loan is through the Obama Student Loan Forgiveness or Federal Direct Loan Program. It is a program of the government to help students repay their student loans in a smoother and easier terms that apply to all federal student loans but not to private loans. With this program, a borrower receives a lot of benefits, such as consolidation of multiple federal loans into one new loan, and the borrower is given repayment plan options that are more affordable and flexible. The different types of repayment plans include standard repayment, graduated repayment, income contingent, income based, and pay as you earn. As determined by the interest rate, the amount of the loan and its terms, standard repayment refers to paying a fixed amount for the entire life of the loan. Graduated repayment allows a borrower to pay lower than standard repayment plan, but the amount increases gradually every two years. With income contingent repayment plan, a borrower can make payments depending on his income, loan balance, family size, and interest rate. Income based repayments are based on the borrowers’ family size and income, not considering the interest rate and loan balance. PAYE or Pay as You Earn repayment has the lowest monthly payment basing on the borrower’s income or ten percent of the discretionary income.

As a student loan borrower, finding out your loan’s grace period is also important. It is typically six months but it can reach up to nine months depending on the type of loan. This will give you sufficient time to find money to pay your loan. Indeed, you don’t have to stick to standard or traditional repayment methods because there are a lot of options out there, feel free to check our website for more information.

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