The harsh reality is, pursuing college is a large financial investment. Since college is costly, those who cannot fully afford college usually turn to the several student loans offered today to assist both the parents and students in financing a very expensive college education.
Also, borrowers must also understand that these loans must be repaid at a specified time frame. Before applying for a student loan, make sure that you have the resources to pay for your debts. For this, both parents and would-be college students must consider on how much debt they can shoulder and when they can repay their school loan debts in order to slash out too much expenses.
Experts recommend that you opt for the student loan repayment programs that would ask for more than 15 percent of the eventual monthly income. Experts also recommend that parents must not exceed to the 40 percent of their gross income for their student loan repayment.
Many of the student loan companies readily provide loan consultants and other online college loan calculators in order to assist the borrowers in finding the best plan for them. In most cases, student loan repayment starts six months right after the college graduation, leaving school, or once the student decided to drop out of school.
A representative will notify the borrower the specific time on when the repayment should start. For this, you really have to make sure that you are capable of repaying all your student loans. Remember that this a debt that you are obliged to pay whether or not you have graduated from college.
To assist the students, there are now many student loan repayment programs that you can choose from to ensure that you can pay your debts on time. First, there is the standard repayment plan. This kind of repayment program allows students to repay their student loans within a 10-year time frame. The payments made monthly are unchanged through the years. Usually, this is the default student loan repayment program unless the borrower opted on a different repayment method.
Another type of repayment program is called the graduated repayment plan. This allows students to first pay a small amount once the repayment period starts. The monthly payment amount and its interest would increase gradually every two years. This kind of repayment program is ideal to those who are expecting work that would provide them sufficient amount of income.
Also, there is the income sensitive repayment plan. This type is likened to the graduated repayment plan. However, the only difference is that the income sensitive plan is based on the monthly income of the student. And lastly, you can also opt for the extended repayment plan.
This allows students to pay their debts in small amount for a long period of time, for more than 25 years or more. However, the only disadvantage is that this kind of student loan repayment program offers higher interest rates since the mode of payment is longer as compared to the other plans.
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