Student Loan Repayment Methods

If there is one obstacle that usually prevent a lot of graduates from investing their hard earned money is student’s loan. Consult various student loan consolidation companies to help you repay your student loan. This loan usually weigh down students who have just graduated preventing them from utilizing new investment opportunities that comes knocking on their doors.

In fact, in 2015 the federal bank of New York revealed that the average outstanding student loan per graduate was $ 24,000 with more than 10% of borrowers owing more than $58,000. So the big question is, how can you clear your student loan fast?

Repaying your student loan

1. Treat the loan like a bill

One method that you use to repay your student loan is treating the loan just like any other monthly bill that you must pay. Just like the way you normally pay your rent at the end of the month, you can also commit yourself to pay a certain amount of money every month until you clear the loan.

When you take this option, you will most likely get a generous tax deduction for the interest that you are paying meaning that you will actually pay less interest. Very few student loan lenders will charge you a pre-payment penalty.

2. Consolidate the loan

Loan consolidation is a way of merging all loans that you have into one single payment. Although you may be forced to pay high interest rate when you take this option, you will have ample time to pay back the loan.

The standard student loan repayment plan for student loan is ten years. However, if you consolidate the loan, you will be given more time to pay back the loan. In fact you can be given up to 30 years grace period depending on how much you owe as well as your payment plan.

3. Income based repayment

If you take this option, a certain amount of your income will be deducted automatically to repay the student loan. This option is recommend for those who have a stable job that generates stable income.

4. Loan deferment

If your loan payments are enormous or if you don’t have a stable income to pay back the loan, it is prudent to postpone making payment or cut down your monthly repayments. This period of relief is usually known as deferment and during this period the government will pay the interest on your behalf.