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Tips on Repayment of Student Loans
by Roshan Tolani

Congratulations on finishing your schooling or earning your degree! Taking out a student loan was a great investment in your future. However, it is now time for you to repay your student loans.

Here's where to start:
  1. The very first step in paying off student loans is to face up to it. Be prepared to repay the loan. Don't waste your energy in devising excuses to avoid it. Realize that it is your obligation to repay your student loans.

  2. Understand the terms of any grace period you may be entitled to. Go through your original loan contract and review it for information about the specifics of your grace period. Normally, the borrower is eligible for a grace period after graduation or after dropping below half-time enrollment at a participating school. For federal Perkins Loans, the grace period is nine months. It is six months for certain federal Stafford Loans and Direct Stafford Loans. However, if your parents borrow a FFEL PLUS Loan or a Direct PLUS Loan for you, then they are not eligible for a grace period. The first payment on these loans is generally due within 60 days after the final loan disbursement.

  3. Know exactly how much you owe and how to make those payments. Keep the following loan documents handy:

    1. Loan applications, promissory notes, loan statements, and loan transfer notices.
    2. Correspondence between you and the lender(s).
    3. Address, phone numbers, and e-mail contacts of your lending institution(s).
    4. Details of people you have talked to at your lending institution(s) or at school.

  4. Refer to the promissory note so that you know your loan rights and repayment responsibilities.

  5. Make timely payments. Do not wait to receive a bill or a reminder from your lender every month. Billing statements are for your convenience only. It is your duty to make payments even if you don't receive any reminder. So, make your payment whether or not you receive a bill.

  6. Look into all of the payment options available to you. Some options reduce the total cost of the loan by increasing the monthly payment, other options make the loan more affordable by minimizing your initial monthly payments. Be sure to select an option that fits your present financial condition.

  7. Respect the loan repayment schedule. Your student loan account balance and status is reported to national credit bureaus on a regular basis. Failing to repay your loan can hinder your credit rating. However, making your payments on time can help you establish a good credit rating.

  8. Another way to save is to pay more than the minimum monthly payment. This will cut back on interest over the life of your loan. Or if you have the means to, you can prepay the whole loan. This will also save you money off of interest, and most loans do not have repayment penalties.

  9. Consolidate your loans. This will save you quite a bit of money over the life of your loan, and can lower your monthly payments. It will also save you time, as consolidation merges all of your loans into one, easy-to-manage loan.

  10. Look into forgiveness programs. In exchange for a commitment to work in a certain field or area for a specific time, many government agencies or other organizations will pay off part or all of your student loans. Forgiveness options are available for many professions including nursing, teaching, physicians and more.

  11. Exercise your deferment and forbearance options if necessary. Deferment and forbearance allow borrowers to temporarily suspend their monthly payments. If you fall upon financial or other hardships, contact your lender to take advantage of these benefits.

  12. Just because you have applied for deferment, forbearance, or consolidation does not mean that you can stop making timely payments. Continue making payments until you are notified that your request has been approved.

  13. Contact your lender(s) immediately if you: (a) change your name, (b) change your address or other contact information, (c) change your enrollment status, (d) have queries about your bills, (e) have problems making your scheduled payment on time, (f) want information on or applications for deferment or forbearance.

  14. Read, maintain and understand all the mail you receive from your lender or loan holder, and respond promptly if you are required to do so.

  15. Take full advantage of student loan IRS options. You may qualify for federal tax breaks and be able to deduct the interest payments on your tax return.

  16. Keep resources handy to answer any questions that may arise in the future. You can review your federal student loan account through the National Student Loan Data System (NSLDS). You can also do it yourself from With your Personal Identification Number (PIN), you can review the type, amount, and the status of your loan. If you need a PIN, go to

As a new graduate, it may be overwhelming to think about paying off your student loan debt. But like most matters in life, understating the terms of your loans will enable you to manage your money and protect your credit as you pay them off.

Disclaimer: This article is only for informational purposes and should not be construed or relied upon as legal advice. We do not make any claims, promises, or guarantees about the accuracy, completeness, or adequacy of any of the information provided in this article.


Article Title : Tips on Repayment of Student Loans
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