Student Loan Consolidation
Half of the battle towards college is paying for the education. The other half is paying it back, right? After graduating, you may find yourself a little over your head with bills. You may have taken a job that barely pays the bills before you land your dream job you went to college for.
That’s normal, and so isn’t finding a way to make payments towards student loans that make sense for you and your wallet.
This article will help you explore some possibilities of paying your loans off without going into default, deferment or forbearance.
Driven Repayment Plans
When you can’t afford the monthly payments you’re making, you may want to check out a driven repayment plan. Driven repayment plans come in different options, so picking out one that makes the most sense to you is crucial.
A driven repayment plan gives you a different monthly amount by considering your income. Here a few options you may want to consider.
RE-PAYE (Revised Pay As You Earn)
RE PAYE is what many consider the most desirable plan. This plan is at ten percent of your discretionary income in a time span of 20-25 years.
PAYE (Pay As You Earn)
With this plan, you’ll never pay more than ten percent of your discretionary income for 20 years of qualifying repayment. The only trouble with this program is that it excludes anyone before October 1, 2011, who took out a federal Direct loan.
IBR (Income Based Repayment)
You’ll never pay more than 15 percent of your discretionary income for no longer than 25 years.
ICR (Income Contingent Repayment)
Never more than 20 percent of your discretionary income for no longer than 25 years.
With the program such as, REPAIR, all Direct loan student borrowers are eligible. There are no date or income restrictions. The reason borrowers love this plan is that it’s the lowest payment amount of all plan over the shortest period of time. The interest rates are typically lower which keeps your balance from ballooning up.
Can I Get Repayment Assistance With My Loans?
If you are enrolling in IBR (Income Based Repayment) and participating in Public Service Loan Forgiveness, then you can use LRAP funds to make those monthly payments until your loan has reached forgiveness.
LRAP is made possible from schools, employers, states and federal governments. If you are pursuing a career as a public defender or state prosecutor, you can receive help from LRAP as well.
Banking experts proclaim that if you have over $10,000 or more in student loan debt, then consolidation is a wise move.
Federal loans like Perkins, Direct Subsidized, and Unsubsidized can be made into a single Direct consolidation plan with up to 30 years to pay back with one interest rate.
Private loans can be consolidated from banks, but not by the federal government. It’ll be up to the bank to determine based on your credit score, what your interest rate will be from the consolidation plan you pick.
Read more: All About consolidation Student Loans
The major risk from consolidation a federal loan like Perkins is that you won’t be able to qualify for the Public Service Loan Forgiveness program.
Student loan consolidation simplifies multiple loans into one payment while lowering your monthly bill and gives you more time to repay. If you don’t have a Direct loan, once you consolidate, enroll into a driven repayment program, then you may qualify for PSLF program.
Don’t fall for gimmicks and schemes that try to charge you to consolidate your federal student loans. Student loans can be consolidated for free. Studenloans.org has all of the pertinent information you need and will even help you make the best decisions depending on your loan account situation.
When it comes to your loans, it can be a little tricky and confusing. That’s because there are so many programs and options available to you. That said, you don’t want to make the wrong decision, so weight out your options carefully by speaking with a leading expert or contacting studentloans.org. Once you consolidate a loan, you cannot undo it. So make sure it makes sense for you.
Whether you pick a driven repayment plan, seek out repayment assistance or consolidate your loan, it’s important to understand that each has their benefits and drawbacks. By using this guide and doing a little research, you will find the program that makes the most sense to you and your student loans.