When students are in colleges or universities, they will be given some loans which will help them complete their studies. The money comes at the right time, and as a student, you think once you get employed you will pay it without much strain. But seemingly this is not the case because at times the employment may not be much sustaining and you may not be in a position to repay the loan easily. For this reason, you will need to pick a loan repayment plan which will lead you towards completing your student loan help.
There are several loan repayment loans, and you will need to choose one that will suit you. In this article, we take you through some the loan repayment options, and we hope they will help you get an option which will help you repay your loan without many difficulties.
Standard repayment plan
The standard repayment plan will allow you to repay your loan in monthly installments for you to ten years with at least 50 dollars a month. If you don’t choose any repayment plan, then you will automatically qualify for a standard repayment plan. The good thing about this repayment option is that you will be in a position to pay off the loan faster as when compared to other repayment plans. Similarly, you will end up paying less interest. If you can pay monthly loan installments which are about high, then you qualify for this type of repayment option.
Graduated repayment plan
This type of loan repayment plan involves you paying the loan while you start slow and with time you will start increasing the number of monthly payments after every two years. The good thing about this loan is that you will be done repaying it within 10 years. For you to qualify for this type of loan repayment option you should not being a position to pay higher monthly installments that are paid for the standard repayment plan. However, you should be sure that your income will be increasing steadily.
Income-based repayment (IBR)
This type of loan repayment option allows monthly payments which are capped at 15 percent of your income which can be readjusted every year based on family size and your income for five years. To qualify for the loan, you will have to be eligible for a partial financial hardship hence payments will be less than those paid at the Standard Plan. Once you show consistency in your repayments, your remaining loan might be forgiven after 25 years.