| When you are consolidating your student loans, it is | | | | into a new market with lower pay? If you are |
| common to be confused by the different repayment | | | | unconfident about your future financial situation, it is |
| plans in the market. The student loan consolidation | | | | best that you consider other repayment plans. |
| comparison below is to help you to be clear of the | | | | 4. Income contingent repayment (ICR) |
| features of the different plans available. | | | | This plan is suitable for you if you have a family and |
| 1. Simple repayment | | | | you are a direct loan borrower. Your repayment |
| This plan gives you a fixed monthly repayment for a | | | | period will be spread to 25 years and at the end of |
| 10 years loan period. If you are looking forward to | | | | the loan period, your remaining loan balance will be |
| settle your loan as soon as possible, you should look | | | | write off. |
| into this plan. | | | | With this repayment plan, your repayment is |
| 2. Extended repayment | | | | calculated base on your total student loan, annual |
| What if you have other priorities to take care of and | | | | income and family size. |
| you can't take out so much money every month? | | | | 5. Income sensitive repayment (ISR) |
| This plan helps you to extend the repayment period | | | | This plan is similar to income contingent repayment |
| to the maximum of 30 years and you can enjoy | | | | plan with 10 years loan period. However, this plan is |
| lower interest rate with this repayment plan. | | | | not included in the direct loan and Federal Family |
| It might be good to extend your payment with a | | | | Education Loan Programs (FFELP). |
| lower interest rate but when you really think of it, | | | | 6. Income based repayment (IBR) |
| you are actually paying more with this plan. This is | | | | This payment plan is said to be initiated on July 1, |
| because loan agencies have to cover back their cost | | | | 2009. And unlike the income sensitive repayment |
| (low interest rate) by extending your loan period. | | | | plan, this plan is available in the direct loan and FFELP. |
| 3. Graduated payment | | | | It works similar to the income contingent repayment |
| This plan was designed to start off with lower | | | | plan with the criteria that you are pursuing a career in |
| monthly payment and increases gradually every 2 | | | | a lower pay market like public service. |
| years. The graduated payment plan has the loan | | | | With this plan, you can enjoy lower monthly |
| period of 12 -30 years and your minimum monthly | | | | repayment but subject to a percentage of your |
| repayment must be at least $25 or the offered | | | | discretionary income (your remaining income after |
| interest rate. | | | | minus off the expenses for essentials) and family |
| This plan was built for young graduates with lower | | | | size. |
| starting income. Its logic is that you will earn more | | | | As you can see, there is more than one plan to |
| money as you progress in building your career. Some | | | | choose from when you want to consolidate your |
| believe that this is a riskier plan as you need to | | | | student loans. Your job however, is to look into what |
| constantly monitor your financial condition. Sometime | | | | you need and choose the plan that is most suitable |
| you even need to do a projection for your income in | | | | for you. |
| the coming months. What if you decide to venture | | | | |