How to Plan Your Student Loans Repayment Schedule
Got too much student loans to pay? Welcome to the real world, where the truth is a bit stranger than fiction. You may take out student loans as easy as you would post your photos on Facebook, but as more students graduate, they can just grind their teeth and hope to land a job to help them repay. Have you been one of them lately? Wonder what student loans repayment schedule is?
You may have forgotten the crash course you took before taking out that federal student loan. Sadly, your student loans cannot be forgiven, unlike credit card loans or mortgages. It’s even easier to walk away form a mortgage than from the student loans you made when you were 19. Worst, this record will get stuck with your credit history as long as you breathe. So, chances of securing a future car or home loan is like you.. standing on stilts. There are plenty of student loans repayment schedule options and calculators offered on the web. Just pick one and stick to your game plan.
What are the Common Student Loans Repayment Schedule Options?
1. You can try a level or standard repayment where you make equal installment amounts until the loan is paid. The amount you pay will depend on how much loan you have and how long you will have to pay for it.
2. Need lower payment? Try your luck with graduated payments where the amount increases every two years, until your loan is paid in full. Overall interest rate is higher than usual.
3. You may also opt for an income-sensitive repayment schedule, where your monthly payment shall be dependent on your monthly income. You can make payments for up to five years.
4. Starting July 1, 2009, those who are having hard time making loan repayments can choose an IBR, or Income Based Repayment. This is only open for federal student loans and some loan consolidation. Monthly payments are set at 15% of your monthly income, where you can repay up to 25 years.
5. You can have your level or graduated repayment option extended to 25 years, instead of ten. This will help lower your monthly payments, though interest rate is higher with time. If you have a Federal Family Education Loan of over $30,000, you may apply for this option.
How Do You Make Your Student Loans Repayment Schedule Work for You?
You need to plan smart when it comes to making a loan repayment, and this includes:
1. Planning a Budget
You may hate Math, but this isn’t the time to be squeamish about it. Learn the art of wise spending and take control of your finances. Call it the best practice you can have in the real world.
2. Paying on Time
How many times do you have to be reminded of this? You don’t want to suffer late payment penalties, on top of your loan’s interest rate. If you find it hard to keep track of payment due dates, you can always apply for an automatic payment.
3. Consolidating Your Loans
What more can be harder than paying your bills on time? You guess it right. Having to track multiple student loans can be a real headache and you can always choose to consolidate all these into one. Just make sure you will have a lower monthly payment load that lets you pay over a long period of time.
4. Going Beyond the Minimum
If you can pay more than the minimum amount due, why don’t you? The more you pay, the faster you will come to being debt-free. It always pays to have a peace of mind.
Ergo: In order for your student loans repayment schedule to work, you need to have DISCIPLINE. Stick to Your Goals!
READINGS:
http://www.forbes.com/2009/07/21/student-loans-repayment-personal-finance-student-loans.html
http://mappingyourfuture.org/paying/standardcalculator.htm
http://www.loan.com/student-loans/planning-your-federal-student-loan-repayment-schedule-intelligently.html
http://nelnet.com/financial_aid_advice.aspx?id=758&path=bsp.fye.ufa.rdm
