Research on the ratio of students taking student loans has revealed some shocking statistics. It is seen that almost 3 out of 4 students have some kind of loan to pay back when they leave their school. Now, these students often look for different ways to get rid of these loans.
- Private Student Loan
The first type of loan is called as the ‘private student loan.’ As the name suggests that they are taken from some private lender that could be a bank or some private lending organization. The private loans have their strict terms and conditions for the length of the time for the loan, as well as for the interest rates which are usually very high.
- Federal Student Loan
The other type is ‘federal student loan.’ This loan is taken from the government lending institutes and most of the times; students take a loan from the government. The federal loans can be categorized as subsidized and unsubsidized loans. In subsidized loans, the student gets to benefit from the government as the government takes the responsibility of paying the interest rate o that loan, while in case of an unsubsidized loan, the student has to pay the interest from the day it is taken.
Student Loan Repayment Options
Once you complete your degree and you are out of school or college, you start thinking about the options to repay that loan. Well, some smart options can help you do this. These include:
- Pay Before the Deadline
The first option could be that as you get out of school or college, you start your work and pay more than the required money for each month. This will help you control your rate of interest that would otherwise build up if the repayment is delayed. The government also offers some kind of standard and graduate plans to the students; you can even follow them to make your repayment process easy and quick.
- Pay Base on Income
If you do not want to follow the standard or the graduate plans, then the other smart option could be the repayment on the basis of your income. You can ask the lender institute to set your repayment on the bi of your income at that time. In this way, you can repay a high percentage of money each month and get rid of the Short Term Loan.
- Delay Your Payment Schedule
This is the option that you can avail when you are facing financial hardships, or maybe you want to continue your studies. In such situations, you can delay your payments altogether. It is advisable to delay the repayment because if under financial stress you start to pay back the loan, it will increase your interest rate and will also make your credit history bad. Therefore, this is the best possible solution to delay the repayment.
Student loan repayment is a strenuous task for students, and there is a lot of burden on them. However, a rational approach can help ease their minds and situation. O more research on these options and decide one for yourself.
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