A student loan is a real benefit for the students, while they are graduating. However, once they have graduated, it becomes indeed a factor of much concern and burden to repay the loan. The sooner is the loan repaid the better. If you fail to repay the amount on time, it might have a significant impact on your future income and savings. Hence, you must follow these simple tips to make the student loan repayment comfortable.
Keep Tracking Your Loan:
It is a must that you keep tracking your loan amount, your repayment status, your lender and your balance amount so that you can plan your repayment wisely. The Federal loans can be tracked down from their official websites. If you cannot find your loan there, there is a possibility that your loan isn’t a Federal one, but a private one.
Know The Repayment Options:
Every student loan comes with a repayment option. In the case of Federal loans, it is usually a period of 10 years. However, there are other repayment options available as well. These are –
- Graduated Repayment
- Income-Driven Repayment Plan
- Extended Loan Repayment
You need to choose the right loan repayment option depending on your need and affordability. It is very important that you choose the right repayment plan. Often students make the mistake of choosing a repayment plan that spans even more than 10 years. This might initially reduce the monthly repayment amount, but the student will have to pay a huge more amount of interest for this extended span.
The income-based repayment plan, on the other hand, is a better choice. But before going with it, you must discuss with the lender about its rules and regulations.
In most cases of repayment trouble, the indebted students make the mistake of missing their repayment. This only adds to the trouble. In fact, a continued non-repayment of the loan amount for 9 months deems the person as a defaulter, and this affects the credit score significantly.
Pay As Much As Possible:
It is always a good idea to pay more than the monthly repayment amount than you are entitled to. Make sure to mention this extra amount to the lender so that it is applied to the loan balance. Though it might make it a little difficult for you initially, the final results are seriously helpful as you manage to get rid of the loan sooner.
Plan And Budget:
This is often taken for granted. But, planning and budgeting can really help you to get rid of your loans sooner. You need to write down all the expenses that you have to bear every month and then, minimize the expenditures as much as possible to save more. The luxuries need to be minimized. Budgeting will help you to manage your loans quite well. While planning, always keep this in mind that you need to repay the most expensive loans at first and then go on to paying the other loans.
With these tips, you will be able to manage your student loans better. Always remember, pay the loans on time to avoid troubles.