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There is nothing as disturbing as an unsettled student loan. For this reason, most students get scared and opt for other more difficult ways to pay their school fees. However, the student loan stops being a burden when you have the perfect plan on how to repay it. Listed below are the steps to use in repaying your loan and avoiding the stress.
- Total up your loans and know the exact amount
The first step is to calculate what you are to pay. This way, you will be able to know and launch a complaint whenever there is an error in calculation. This does not only mean knowing the exact amount alone, but you also need to read and understand the terms of your repayment. Another essential thing is to know the interest rate. This can help you do your calculations and make a personal plan. The best way to know all these is by physically visiting respective offices and getting a full statement on the same.
- Make a plan
After calculating the total amount of money, you are to repay, come up with a plan. If you are employed, determine your total income and analyze your expenses. Decide on the percentage out of the income that you should dedicate towards settling the loan. It is crucial that you do as you plan, unless of course in unavoidable circumstances. There is also the option of autopay. It is a preferable choice of repayment plan for people with a consistent flow of cash. In this, a specific percentage will always be automatically deducted from your income at set intervals, for example, on a monthly basis.
However, if you do not have a source of income yet, you should apply for deferment, which allows you put the loan on hold, or forbearance, which lets you suspend loan repayment for not more than a year.
- Consider one-time or large payments
It is usually advisable that whenever possible, you should consider making extra payments to your initial payment plan. For example, when you had previously decided to use 20 percent of your total income in repaying the loan, you can occasionally push it to 50 percent when possible. This strategy helps you get done faster with the burden of the loan, and you may also evade future high-interest rates.
- Consolidation or refinancing
This might be a contradiction to the previous point, but both are applicable depending on your credit history and the number of loans you have. If you have some other loans that you should pay, you can consider having a plan that takes just a small percentage from your income or making the loan private. Both options have effects, the first one will take a more extended period, and the second one will take away all the privileges and rights that come with federal loans.
- Ask for support from your employ
After getting a job, you can ask your employer if there are programs dedicated to helping employees pay for the student loans. If yes, you should evaluate the terms and decide whether or not the program suits you.