Repaying Your Student Loan Debt

Student loan debt repayment can’t be dodged just like that, but there are so many things you can do to take the sting out of the bill you will receive monthly. Below are some student loan debt help tips.

If you can, repay some of your student debt before graduating or before your interest deferral period ends. Early payments for subsidized loans are applied to the principal, and this will lessen both your principal balance as well as the interest you pay over the life of the loan. Payments toward unsubsidized loans are initially applied to accrued interest. However, it can also lessen the life of the loan and will spare you money over the long haul.

Federal student loans that were issued before July 1, 2006 have variable rates, and this would only mean the interest rate resets yearly on June 30. Federal loans issued after that date have a fixed interest rate.

If the current interest rate on your federal loan is not fixed, consolidate the loan to lock in a fixed rate. Consolidating fixed rate loans also has advantages, which also includes the ease of a single monthly payment. A lot of lenders also give bonuses for consolidation like a rate reduction of .25 to 1% after a number of on-time payments, and probably an additional .25 to .50% rate reduction for automatic payments.

There are some lenders who will offer a two to nine-month grace period after your graduation. The grace period could have interest subsidies. To make sure that you receive all the subsidies, inquire with your consolidation lender and ask to accept your paperwork in time to receive the best rate, but delay processing until your grace period is about to expire.

When money is hard, it’s always tempting to skip a payment, or avoid paying altogether, but default penalties are severe. Rather, contact your lender as soon as you know you’re in trouble and let them assist you in choosing a different repayment plan or applying for a deferral or forbearance.

Student loan debt can be challenging, but taking advantage of consolidation offers will aid you in getting a handle on your payments, and lessen the number of bills you have to pay every month.

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