What to Know Before you Start Paying Student Loans

Student Loan installment payment check paying back money owed in obligation for borrowed funding for college or university education. Photo courtesy of Shutterstock.

Paying for a college education can be expensive, and many students will use student loans to finance at least a portion of their education. Most graduates leave school owing tens of thousands of dollars or more, and these funds must be repaid at some point. If the time has come for you to start making your payments, it is important you understand what all of your options are for handling this debt.

Establish Affordable Payments

You may have many student loans that each have a separate payment due date and minimum monthly payment. You may be able to select a term length to make the payments affordable for you, or even refinance your loans or consolidate them to make the payments more affordable and manageable. Talk to the lender about different options for making payments easier to make and track.

Consider Deferment If You Cannot Pay

If you are not financially ready to start making your student loan payments, you may consider requesting a deferment. This essentially is the same as asking for a delay in your payments. Interest may accrue with some types of loans, but this is not the case with all of them. You must formally request the deferment, and have a legitimate reason for requesting the deferment. For example, the deferment may be requested due to military service, unemployment, or another similar reason.

Apply for Forbearance

Forbearance is another option if you are unable to make your payments right away. This is typically pursued if an application for deferment is not granted, and may stop your payments for up to 12 months. It often is requested due to illness or financial hardship, but may also be granted if you are attending medical school, are teaching, or for various other financial reasons. Interest will typically continue to accrue during the forbearance period, and can increase your payments when you do start paying them.

The options and rules for different types of student loans can vary. It is important to know what type of student loans you have, and to learn more about the options available for those specific types of loans. Keep in mind, you may be able to work with a debt negotiator or company like My Lump Sum to structure a lump sum or debt settlement plan, and these may help you to reduce the amount of money you owe, regardless of the type of loans that you have. When you understand all of the options available to you, it makes it easier to be able to manage your student loan debt.

“Brooke Chaplan is a freelance writer and blogger. She lives and works out of her home in Los Lunas, New Mexico. She loves the outdoors and spends most her time hiking, biking and gardening. For more information contact Brooke via Twitter @BrookeChaplan.”