How to Plan for Repaying Your Student Loan

Student loans are used by nearly every student attending college. They are a fact of life for students. Those who have a repayment plan developed are ahead of the game when graduation rolls around. Student loan repayments begin just months after you graduate, so start planning for repayment now, before you fall behind.

Instructions

1. Set up a plan with your lender based on projected income. If you're an art history major, your income right out of school is lower on average than an engineer's. Predict how much money you'll be able to pay back as the years pass.

2. Most of the time there is a grace period following your graduation before you have to begin paying back your loan. Don't just count on this, though. Confirm with your lender and then factor it into your repayment plan.

3. Establish a budget with all your fixed and adjustable costs. Prioritize this list, with student loans being near the top.

4. Review the option of consolidation for multiple loans. A consolidated payment plan allows you to pay one easy monthly payment with lower rates and longer terms.

Tips & Warnings

• Stay on top of your payments so as not to incur payment penalties.

• The larger monthly payments you are willing to make, the less money you'll spend repaying.

• If for some reason you are unable to make payments, discuss your options for deferment or forbearance, which will put your loan payments on hiatus until you're financially able to pay them.

• Make your payments on time to avoid going into default . Defaulting may damage your credit history permanently.