A Guest Post –
After graduation, most loan companies give you a six-month grace period and then expect you to start paying back your loan. The repayment plan is usually set to a ten-year schedule. If you have the money to pay the loans back, this is generally the best way to avoid high interest rates and pay down your principal. Most struggle with this type of repayment plan. Fortunately, there are ways to alleviate your monthly student loan burden. The first thing you will want to consider is loan consolidation. Consolidation allows you to pay one amount each month instead of sending payments to several different loan companies. It also gives you the option of lengthening your repayment schedule so you can pay back less money each month. Be aware that you will inevitably pay back more interest over the life of the loan using this method. Several different loan repayment options are now available.
The government offers an income based and income sensitive repayment option for those with federal loan debt. These plans calculate the amount you owe based on your monthly income and number of dependents. It is not uncommon for some to have a monthly payment liability of zero while on these plans. In addition, loan holders who work for a government or nonprofit agency may qualify for loan forgiveness after 120 consecutive monthly payments. Finally, there are other more drastic options out there for those who qualify. Deferments allow those who are unemployed, in school, or under a financial hardship to postpone payments for up to six months at a time. Remember that defaulting on your student loans will only mean trouble down the road. Even bankruptcy won’t allow you to get out of this responsibility. Before you default, call your loan company. They are usually willing to work with you on a repayment plan.