Student Loan Repayment Option

With the cost of higher education rising, more students may be having problems paying off student loan debt by the time they graduate. If you are facing difficulties paying back your student loans, it would be good to know your repayment options:

Student Loan Consolidation – This option allows you to combine your existing loans into one loan. This makes your student loan payments more manageable. In addition, consolidating your student loans can help you lower your monthly payment. You can also get a lower interest rate. However, student loan consolidation also increases the term of your loan, and this could increase the amount of interest you pay by the time your loan term ends. In case you choose this option, it’s highly advisable that you take the advance payment option as soon as your financial situation improves. The sooner you complete your payment, the more you can save.

Economic Hardship Deferment – You may be able to qualify for this option if you have a low-paying job. If you do qualify for this type of student loan deferment, be sure to use the time to save as much as you can and improve your financial situation, since this option is only limited to a specified amount of time to be determined by your lender.

Unemployed Deferment – Another type of student loan deferment, this option is available to those who are unable to find work by the time the grace period of your loans end (usually six months after graduation). You will be given three years to defer payment, so be sure to use this time wisely to find employment. The Federal government will only pay the interest on subsidized Stafford loans. Interest on unsubsidized loans will be covered by you.

Forbearance – If you are still having difficulty paying back your student loan, you may need to consider forbearance. You’ll have to be open to your lender and be honest about your financial difficulties. If you can qualify for forbearance, your lender will allow you to pay a lower payment. This way you can at least avoid default.