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Student Loan Repayment - The Tedious Time


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The student loan repayment process begins immediately after availing the loan. While interest should be paid immediately after availing the loan, the principal repayment begins only after the completion of the course or a little before. In case of subsidized loans the government bears the interest cost, while only the principal amount should be repaid by the student. The repayment constitutes a major chunk from an individual's earnings, hence proper planning right from the time of availing the loan through the payment period is essential to meet the liability without fail. The monthly income should be segregated to meet both the repayment installment and the other monthly expenses. Again, all these arrangement work only if the individual is decently employed.

Types of Repayment Plans

There are different kinds of repayment plans

  • Standard Repayment
  • Extended Repayment
  • Graduated Repayment
  • Income-Contingent Repayment
  • Income-Sensitive Repayment
  • Income-Based Repayment

After having chosen the right kind of a repayment plan it is important that you monitor the loan process. Identifying the grace period and choosing the right payment plan should go hand in hand. As far as possible avoid defaulting of payment and the consequential cost by making payments on time. Understand the terms of loan, maintain contact information, provide automatic debits from your accounts and immediately inform the creditor in case of trouble.

Switching and Comparing Repayment Plans

You can switch from one repayment plan to another once in a year, provided the new plan does not extend beyond the original plan. You should compare the various repayment plans setting a standard 10 years period in order to actually find out the most beneficial and aptly suited program. Instantaneous comparison details are provided online by the lender company in order to decide the plan to be adopted. Ground work is absolutely essential in order get the maximum benefit.


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