There are a variety of student loan repayment programs available. The overwhelming and confusing part may be choosing the best one for you and your financial situation. That is what you should focus on when searching for a viable student loan repayment program – what best suits you and your financial situation.
What Repayment Programs Are Available?
There are about four different types of repayment programs available depending on which lender you choose for your repayment plan. Here are the four basic repayment programs available-
Level Repayment Plan: This plan keeps your payments the same amount each month so you know what to expect to pay every month. There may, however, be a variable interest rate involved in this repayment plan that could change your monthly payments. In the long term, this could very well be the least expensive plan of them all.
Graduated Repayment Plan: This plan will offer you lower payments now, but will increase in the future. This is good if you have graduated and will begin your career in your chosen field. It will give you the time you need to start making a substantial living before you have to start making larger monthly payments.
Income Sensitive Repayment Plan: This plan is specifically for federal student loans. The best part about this option is that your payments will be based on how much money you are making. However, you will have to reapply for this plan on a yearly basis and can be one of the most expensive programs in the long term.
Extended Repayment Plan: This plan is available only for specific loans: the Federal Stafford, PLUS, and consolidation loans. There are certain things you must have in order to qualify for this loan, such as a certain amount of student loan debt, as well as when you received these loans.
What Are The Benefits Of Looking At A Repayment Program?
The main benefit of looking at a repayment program is that you can research all of the available possible ways to repay your student loans. You just might find a repayment program that better suits your needs rather than a student consolidation loan.
What Should People Be Wary Of When Investigating Repayment Programs?
Interest Rates: Interest rates pretty much determine how much you will b paying in the long run. Your rates can make your payments higher or lower in the long run. Be sure to know everything you can about your interest rates and if they could change in the future.
Entire Repayment Plan: You should know everything there is to know about a repayment plan before you choose it. Do not just focus on what you will need to pay this year – look at what you will be expected to pay over the entire period of your repayment plan.
You could qualify for some incentives on your repayment plan. Ask a customer service representative about these. Ask if they have any incentives for paying on time, getting your payment debited from your bank account, and anything else.
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