| You've finally graduated. Somehow you got a career | | | | without penalty which will lower the interest on the |
| in this terrible economy. You're independent and | | | | loans you have yet to pay back. |
| ready to face the world by yourself. Unfortunately, | | | | Lowering or postponing your payments |
| this means paying more bills. One of those will most | | | | * Depending on your financial circumstance based on |
| likely be your student loans. Paying back student | | | | the company you work for, you might want to find |
| loans could possibly be the most annoying bill you | | | | a payment plan for your student loans with a low |
| have as a young professional...and possibly the most | | | | monthly payment. Federal loans through Sallie Mae |
| important. | | | | that offer lower monthly payments are: |
| Most student loan payments don't start until 6 | | | | - Extended repayment - gives you up to 25 years to |
| months after graduation or until the New Year after | | | | pay back loans. This makes monthly payments lower |
| your graduation. For example, if you graduated in | | | | but makes the overall loan balance higher through |
| May, you won't have student loan payments until | | | | interest |
| January. The average college student comes out of | | | | - Graduated repayment - this allows Stafford, Parent |
| college with $20,000 in debt. This is a lot of money, | | | | PLUS Graduate PLUS, and Federal Consolidation loans |
| but the good news is a lot of people are in the same | | | | to have reduced rates as low as just the interest. |
| boat as you. | | | | Also, many who choose this repayment option need |
| Here is a good step-by-step process for paying back | | | | to repay during school as well because the |
| your student loans. Keep in mind that late payments | | | | repayment option takes so long. |
| can affect your credit score, and make it harder later | | | | - Income-sensitive repayment - You apply annually to |
| in life to buy a car, a house, move to a different city | | | | this payment option; paying 4-25% of your monthly |
| or even get a credit card. Making payments on time | | | | gross income along with the monthly accrued interest. |
| is extremely important. | | | | - Income-based repayment - This plan allows |
| Before you choose a repayment plan... | | | | customers to make monthly payments that are no |
| * Understand the repayment options available to you. | | | | higher than 15% of their discretionary income. This is |
| * Compare your repayment options. Sallie Mae has a | | | | designed for people with higher loan balances as |
| Loan Repayment Calculator available to help estimate | | | | compared to their incomes |
| monthly payments. | | | | * Postponing your payments can be done in two |
| * Know the importance of paying back your loans. | | | | ways; Deferments and Forbearance. Deferments is a |
| As previously mentioned, your credit score can be | | | | temporary suspension of paying back student loans |
| greatly affected if you don't make loans on time | | | | whereas a forbearance lets you suspend or reduce |
| * Understand that choosing a plan with lower | | | | your student loan payments under certain |
| payments may result in higher costs over the life of | | | | circumstances and for specified periods of up to a |
| the loan. | | | | year at a time. |
| * Know you can prepay your loans (partly or in full) | | | | |