Repayment of Students
You might require loans for doing your online degree programs. But then you need to repay these loans on time too, so that it does not increase in amount up and bother you later. There are various ways in which you can repay the loans. These are:
a) Making regular payments: It is absolutely necessary that you make regular payments. Also these payments should be made on time. There is a great advantage of making regular payments. It is often seen that if you pay 48 consecutive loans on time, then the lender might grant you some discount in your rate of interest. If you are planning to avail the facility of instructing your bank for transferring the amount, then you would get some more interest deductions.
b) Go through the various repayment plans: Always ask about the various ways of repayment, the moment you go for a loan. You might have difficulty in meeting the payments, and then it is always better to seek the alternative repayment options. On the presumption of your next salary hike, you can go for a gradual repayment plan. Here you can start with a low monthly payment and let it rise slowly over a period of 12 to 30 years. This should however, depend on the size of the loan.
c) Take the help of tax breaks: Tax breaks are always huge advantage for the loan payers. The federal government generally offers relief for those tax payers, who have taken student loans. If you have an income that makes you eligible for tax breaks then you can deduct the interest you need to pay in a year. Generally the income level to become eligible for tax breaks from the perspective of student loans are, $65000 annually for those who are single and $130000 for couples.
d) Consolidating the loans: It is often seen that students apply for two loans at a time. When you are in such a situation then it is better that you opt for the idea of consolidating the loans. This would mean that you would have a new interest rate to pay. Though the rate of interest will take into consideration the average of both the loans, it will not exceed 8.25%. You should always try to pay these loans on time and get the discounts offered by the lenders.
e) Defer the loan payments during financial crisis: If you are going through a financial crisis, then go for deferring the loan payments. You can go for deferring the loans, if it is a subsidized Stafford loan, where the government will pay the interest. If you cannot get the option of deferment, then go for forbearance for a year and defer the payment for some time. Though the interests will accrue, you will not get a bad credit report.
