Learning About Finance and Money
3 Ways To Manage Your Student Loan Payments
Jordy De Pijper
Many individuals end up taking out student loans on the path to get their higher education degree. They are an easy way to fund college tuition costs without having to worry about competing for grants and scholarships with countless other individuals. Unfortunately, many end up finding themselves in debt over their heads with student loans and worry about how they are going to be able to repay their loans without tapping themselves out. Instead of stressing out over these loans, you can take control of your finances using a few simple repayment options offered by the lender.
Income based repayment plans
One of the best repayment options for those with student loan debt is the income based repayment plan. With this particular plan, you will have to provide the lender with your income information from your tax returns. They use that dollar amount and your total family size to determine whether you qualify for a reduced payment and possibly even a $0 payment. If you are unemployed, you should automatically qualify for a $0 payment. You will just need to write a letter documenting your case and stating what type of income you receive. If you qualify for the $0 payment option, they will put the amount in effect for an entire year. Every year you re-certify and see what your dollar amount is going to be.
Deferment or forbearance
Deferments are ideal for those who are still in school and pursuing their degree. The lender will keep reapplying the deferment for every quarter you are in school full-time. This postpones your payments and prevents you from having to pay. A forbearance is for those who are still trying to apply for other repayment plans and need to postpone payments temporarily while they wait for a decision on other options.
Loan forgiveness
Individuals working in certain fields, such as teachers, might be able to have their loans forgiven after so many years of payments are made on them. Make sure to ask the lender if you qualify for this particular program. It could save you a small fortune on your loans. Whatever balance you have left at the end of their required term will be wiped out. Whether it be $5,000 or $50,000, you won't have to worry about being saddled with the debt any longer.
By looking into one of the different payment terms above, you can save yourself a fortune over the life of your loans.
Share
Hello, my name is Remy. When I was a young kid, I tucked all of my funds into a savings account set up by parents. When they found out I was saving every last dime, they helped me split the funds into a sustainable allowance for saving, spending and giving. I would like to teach you to use this method on your monthly funds. A healthy budget allows you to cover all of your obligations plus giving back to your community. I welcome you to visit my site often to learn all you can about finance and money. Thanks for coming by.