3 things to know before starting your student loan repayments

Graduating from college is a huge achievement for many students since it marks the beginning of using your acquired skills in your desired career. However, if you have student loans, graduating is simply a reminder you need to start paying your debt.

Unfortunately, if you don’t plan your student loan repayment, it can take a toll on your finances and cause you to default. Before you start making your student loan payments, here are some things you should know.

1. Repayment options available

Repayment plans are different; thus, it’s essential to compare various options to find one that best suits your needs. For instance, the standard 10-year repayment plan is not your only option. You can go for income-driven payments or pay-as-you-earn.

Additionally, the repayment option you choose should focus on your income. For instance, if you have a low income relative to your student debt, income-based repayment is your best choice. On the other hand, there are extended repayment plans that spread your payments for a longer period while graduated repayment plans allow you to pay less at first and more with time.

2. Set up payments

Many graduates end up in default because they don’t know who and where to make their payments. As a federal student borrower, you’ll make your payment to a loan servicer and not directly to the U.S Department of Education. 

Therefore, always find out who your loan servicer is and provide them with updated contact information. This way, they can easily reach you with information such as your first payment and the process of making payments.

3. Your monthly repayments

It’s vital to calculate your loan payments since they play a huge role in your monthly spending. Once you get an idea of your monthly repayments, budget it into your salary to make sure you don’t miss any.

You can also opt to pay more than the required amount to save on money that could have been paid as interest in the long run. Unfortunately, this can make your monthly budget tighter.

StudentLoanify can help you with your student loan repayment plans to ensure you are on track after graduation. Contact us today for more information about student loans.