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Consolidating Student Loans May Help You Manage Debt
A college education is one of those things that will stay with you forever. It can benefit you for a lifetime. Unfortunately, some college graduates feel like their student debt may always be with them, too. By working out a repayment plan and employing some smart budgeting, however, you may be able to put your student loans behind you before your college sweatshirt fades.
Understand Your Options
Generally, you’ll have from 10 years to 25 years to repay federal loans, depending on which repayment plan you choose. Most lenders allow borrowers to adjust repayment terms to suit their individual needs and circumstances. You may be able to select:
Standard repayment. You’ll pay a fixed amount each month for up to 10 years.
Extended repayment. You’ll pay either a fixed or graduated amount over a period of up to 25 years. Your payments will be lower than they would be with standard repayment, but you’ll ultimately pay more for your loan because of the interest that accumulates during the longer repayment period. This option is only for people with high student loan balances.
Graduated repayment. You’ll make monthly payments for up to 10 years, but the payment amount will be low at first, then increase every two years. If you expect your income to steadily increase, this can be a good option.
Income-based repayment. Your required monthly payment is capped at an amount that is intended to be affordable based on income and family size. This option often allows for a longer repayment period.
If you have multiple loans, consolidating them can make it easier to manage the debt, since you will have just one loan and one lender. It may also lower your monthly payment, easing the strain on your budget.
If you have private student loans you’d like to consolidate, contact a loan officer at The White House Federal Credit Union. We’ll be happy to help you explore your options.