So you are done with the stress and frustration of school, but now you have to deal with the stress and frustration of paying off all your student loans. With the progressively rising cost of education, you may be leaving school with insane amounts of student loans to pay off. The key is to pay them off as quickly as possible if you want to save yourself some money, because if you wait then you end up paying more in interest.

Various Loan Payment Options

Once you graduate, you will get 6 months grace period where you don’t have to pay your loans, but after that the interest starts to compile. There are various payment options so you can choose the one that works best for you:

• Pay in full: This is most likely not a viable option for most, otherwise you wouldn’t have gotten the loan in the first place; however, if you have the money, you do have to option to pay it all at once and save money on interest.
• Standard payment: This is typically a 10 year plan where you can pay back your loans with interest. Your payments will be high, but you will get a really good interest rate.
• Graduated payment: If you plan to make a steadily increasing salary, then this would be a good option for you. You will start off with low payments, and then they will gradually increase over 10-30 years depending on how much you pay off.
• Income-based payment: You can get up to 15 years to pay this off and can choose to make your monthly payments proportional to your income.
• Long-term payment: For this type of loan repayment you simply make your monthly payments (plus interest) for thirty years.

Deferring Payments (if needed)

If you are having a hard time making your payments and are looking for another option, then here are a few alternatives you can look into:

• Loan consolidation. If you are in a situation where you have multiple loans, then with a loan consolidation you can combine all of your loans into one big loan. You will get more time to pay it off, but more interest will be compiled. There are many companies offering loan consolidations; you have to do your research and shop around for the best rate should you consider this option.
• Deferment. If you need a little extra time to save for your loan or you don’t have the money to pay then you can try to negotiate with your creditors to give you a period of time where you don’t have to pay, but still let the interest compile. If you go back to graduate school, you can automatically defer your loans.
• Forbearance. Forbearance also allows you to negotiate with your creditors to get more time to pay off your loan. It is similar to deferment, but differs in the fact that you get a designated three-month period if you prove you have financial hardship.

About the author:

Compass Technologies is the company behind Kwik-Loan consumer finance software and Kwik-Dealer indirect lending software.