3 Lessons Learned: Loans

Things Every Student Should Know About Student Loans and Obama Loan Forgiveness

For students who are in the verge of graduating, May is a very important month. You need to think of your student loans aside from thinking your final exams and looking forward to your dream job. You need sufficient cash in order to cover the costs of repaying your student loans after graduation as they start to kick in. If you only have one student loan, then that would be much easier, but in reality, you have multiple loans, so repaying it will be much difficult. It can be confusing dealing with various agencies and you might not be fully aware of the amount you owe and when you need to process a payment. It is a good thing that this can now be simplified with a small dose of organization, and you only need to know the minimum amount of each loan and its due date so you can write it down or just create a direct debit account so the payment will just be obtained from your account.

One way to help new graduates in reducing their loans is by taking advantage of Obama Student Loan Forgiveness or Federal Direct Loan Program. It is a program of the government to help students repay their student loans in a smoother and easier terms that apply to all federal student loans but not to private loans. With Obama Student Loan Forgiveness, the borrower reaps a lot of benefits such as being able to consolidate multiple federal loans into one new loan, and the borrower is given repayment plan options that are flexible and affordable. The different types of repayment plans include standard repayment, graduated repayment, income contingent, income based, and pay as you earn. For standard repayment, a fixed amount is paid by the borrower for the entire life of the loan, basing on the interest rate, term of the loan and borrowed amount. Graduated repayment allows a borrower to pay lower than standard repayment plan, but the amount increases gradually every two years. With income contingent repayment plan, a borrower can make payments depending on his income, loan balance, family size, and interest rate. A borrower can make payment basing n the income and family size or fifteen percent of their discretionary income for income-based repayments. PAYE or Pay as You Earn repayment has the lowest monthly payment among the rest of the repayment plans that depends on the borrower’s income or ten percent of the discretionary income.

It is important finding out the grace period of your student loans. It ranges from six to nine months and it depends on the type of your loan. This will give you sufficient time to find money to pay your loan. There are many options available for you, so try to read more of them by visiting our website.

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