Guide to Student Loan Repayments
Quite a big number of new college graduates find it difficult to make student loan repayments. Basically, student loans are given 6 months grace period after graduation before a student loan repayment would commence. The problem lies in the fact that a lot of new graduates find it difficult to find a job.
In most cases, it would take more than six months for these new graduates to find the job that best suit their qualifications. Also, students who are working may be underemployed or working part time and income may only be enough for the daily needs.
There are several strategies wherein a new college graduate can meet student loan repayments. First and foremost is proper finance management. Keep living expense at a minimum, at least for the first few years when income is not yet stable. Living with a roommate in a smaller apartment is a good cost cutting measure.
If you have taken a federal student loan, you can apply for forbearance. Forbearance is a temporary suspension of repayments applied for by a borrower who has fallen to hard times. In this instance, the borrower has already started making loan repayment but financial difficulties hinder him from continuing with the repayments.
Loan consolidation is another debt relief solution. Loan consolidation has two plans-the income contingent repayment plan and the graduated repayment plan. Student loan repayments are made easier in the income contingent repayment plan as the monthly payment that will be adjusted annually will be based on the income and family size.
Monthly payment would start at a low level in the graduated repayment plan. Usually only the interests are paid and the monthly payment will be increased gradually until the whole balance is paid. However it should be noted that loan consolidation can be applied only once. Borrowers who have already consolidated their loans and still find difficulties in making student loan repayments may then apply for forbearance.
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