If you’re still in college, or if you have a child or family member who is, you may be considering your options about how you can schedule repayments of student loans to best reflect your financial position, but how do these schedules actually work? What are the options available? What can you expect when choosing a particular schedule, and are they customisable to your needs? In this article, we explore what you need to know about paying for higher education, and tips to help make your repayments as affordable as possible.
What are the Course Payment Plan Options for a Student Loan?
After taking out a student loan, you will always have to pay it back one day. This will either be whilst you are still in enrolled in the university courses, yet still earn sufficient amounts to make repayments, or when you have graduate and continue to pay back the remainder once employed. Either way, it’s important that you know what course payment plan options are available to you as a borrower. Having knowledge about course payment plans can help reduce your monthly payments, prevent collections agencies from contacting you and allow you to make course payments plans according to how much money is coming in each month.
What Payment Frequency Should You Select for Your Tuition?
Having a course payment plan leaving you with more money per month may sound better, but it isn’t always beneficial. If you have a limited income, you may have trouble making full payments if you don’t receive paychecks on a regular basis. Once your tuition balance is paid off in full, you will be able to save more money from each paycheck by switching to an income-driven plan with reduced monthly payments. If you can afford it without hardship, go ahead and make larger monthly repayments from your course plan. This way, when your balance is paid off sooner rather than later, you won’t have any additional interest due over and above what your standard repayment term would incur.
Will Schedules Vary Between Loans
The federal government is responsible for most student loans, and it offers two main types: subsidized and unsubsidized. Unsubsidized loans are always more expensive, but they may be your only option if you do not qualify for any financial aid or have already borrowed up to your maximum limit. Most private loan providers offer at least one finance option. Be sure you understand what interest will accrue while you’re paying down your balance, as well as whether or not penalties will apply if you miss repayments. You should also ask about getting on a graduated repayment schedule, which is a good idea if you’re concerned about falling behind on student loan repayments in an effort to save money over time.
Who is Eligible for a Student Loan
The typical borrower takes out federal student loans. To be eligible for federal loans, you must be enrolled in school at least half-time, and you can’t have any delinquent repayments or defaulted student loans already on your record. Many universities and schools also offer their own financial aid packages to students with exceptional need or academic merit. Be sure to research these offerings as well—you could get more aid from your school than from direct government programs.