Once students enter the real world, they will soon feel the pressure of repaying the money they borrowed for the realization of their college education dreams. As the college loan repayment notices begin to decorate your mailbox, how will you manage the debt and what are the options you may choose from that will help your current financial circumstances?While many former students start to panic and “stress out,” others calmly review the many options that college loan lenders offer. Most college loans come with a grace period before any money is expected. This gives plenty of time for individuals to sort out their finances and approach a reasonable course of action. Depending on the college loan, this grace period may last six to nine months, which starts the day after you walk across the graduation stage. The grace period also becomes active when a student has left school or enters half-time enrollment status.Once the grace period begins, a lender or designated company will send a student loan repayment schedule through the mail. Some of the details you will come across include the total amount of money you are expected to repay, an estimation of monthly payment totals, and the due date of your first payment. You will also receive important information that allows you to make the best decision on college loan repayment. When it comes to giving back what is due, there are four main college loan repayment choices to consider:Level Repayment PlanUnless you choose to make a switch, most repayment schedules are set up under this option while in the grace period. The Level Repayment Plan means that borrowers will have to pay the same amount of money on a monthly basis until all debt is repaid.Graduated Repayment PlanThis plan choice allows borrowers to gradually enter their loan schedule with lower monthly payment expectations at the start of their repayment period. The further they move along, gradual increases in monthly payments will occur, allowing individuals to pay off their debt in the same amount of time as the Level Repayment Plan. Having smaller payment requirements in the beginning does come with a price: higher interest added to the full amount of repayment.Income-Sensitive Repayment PlanAssociated with federal loans, this plan option allows monthly payments to increase and decrease when ups and downs regarding income occur. This means if you suffer a blow to the bank account, you don’t have to worry about your college loan repayment worsening the situation. While this selection is the most flexible, it also means you will be paying more in the long run.Extended Repayment PlanBorrowers who have a Federal Stafford, PLUS and/or Consolidation Loan under their belt and received it after October 7th, 1998, can choose the Extended Repayment Plan. The loans must also equal more than $30,000 from the Federal Family Education Loan Program. Repayment under this plan occurs for up to 25 years.Loan ConsolidationWhen you have borrowed money from more than two student loan lenders, you might want to look into the benefits offered through college loan consolidation. This means that all of your college debt is lumped into one monthly payment that is much lower than separately paying each loan commitment.
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