WHAT ARE YOUR REPAYMENT OPTIONS?

When you consolidate student loans, you will have a few options as to how you much you will pay each month. Giving students options helps them through their transition period from students to working adults. If you are starting to stress out about finding a job that will cover your expenses and your student loans, you should first opt to consolidate student loan and decide which repayment plan you can securely pay each month. Defaulting on a student loan could ruin your credit for many years. Below are some of your options.

Most students will opt for a level repayment schedule, which means that after they consolidate student loans, they will make the same monthly payment each month until the loan is paid off. Graduated repayment terms are slightly different in that they will start out as lower monthly payments because you will only be paying on the interest at first. As time passes, you will begin to pay the balance. The loan will then become a level repayment.

An income-sensitive repayment plan may be used if you have a monthly income that fluctuates. You will have to show proof of this so that your monthly loan payments can be adjusted. The last loan option is extended repayment. If you have loans that exceed $30,000 you can opt to pay these loans for up to thirty years.