Student Loan Repayment Plans: Important Facts to Consider

Fresh graduates face steep education debts. To settle these, several payment plans are available to select from. Deciding which payment plan to settle on is a critical step that will determine the ease and length of the debt repayment. Expert advice from Alum Financial on Pinterest can help the borrower select the appropriate loan repayment plan. Some factors to consider include the type of loan owed, the amount owed, and the financial goals of the borrower.

The three types of students’ loans are federal, private and refinance loans. The Government provides federal loans, while banks and credit institutions give private and refinance loans. Your repayment plan will depend on which type of loan you owe, and some payment plans do not apply to certain loans. For instance, the Extended Repayment Plan is strictly for federal loans and does not apply to private loan debt.

Type of loan owed

Income

The current and projected earnings of the borrower will also affect the student loan repayment plan selected. What you need is a wholesome analysis of your current and projected financial situation. This includes your earnings, expenditure and projected earnings for the next 10 or 20 years. Reach out to an expert student loan repayment advisor such as Alum Financial to help you decide which repayment plan best works for you. Learn About Alum Financial on SlideShare.

Goals

The financial and lifestyle goals of the borrower must be considered when choosing the repayment plan. Once faced with the steep debt, a borrower may panic and shelve their career or entrepreneurial ambitions for a basic job to pay off the loan. On the other hand, one may choose not to prioritize the loan repayment by making low monthly repayments; ultimately paying more interest charges. It is best to seek the help of a student repayment consultant like Alum Financial while making these decisions.

An expert advocate, such as Alum Financial, will recommend the Standard Repayment Plan for those who wish to pay their loans off in the shortest time possible and reduce interest charges. On the other hand, the Revised Pay As You Earn Repayment Plan (REPAYE) plan will be ideal for those that want low monthly payments and don’t mind higher interest charges. Ultimately, every individual must consider their circumstances very carefully before making a decision on which repayment plan best suits them. The plan you choose can affect other financial and career decisions you make.

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