Negotiating on Student Loans
If you are struggling with your student loan debt, you may be wondering what steps you can take to bring problems associated with your students loans under control. Through this article, you will be provided with some basic information designed to help you in negotiating on your student loans.
Understanding Student Loan Grace Periods
Most federal loan programs offer a grace period of between six and nine months after graduation before your repayment period begins. During that time, you should get a certified letter reminding you of your student loan responsibilities and spelling out a repayment schedule. You will need to gather all your paper work together on all your loans and find out who you owe, how long you have to pay it back and how much you should be paying each month.
Taking the Initiative to Negotiate Student Loans
Should you find yourself in a position that you are unable to pay the amounts that are required on your student loans you will want to negotiate another payment plan with the lenders before you delay for very long? The lenders will be more than happy to work out a flexible option for repayment if you will contact them.
Standard Payment Plans
Standard repayment on student loans is normally a fixed amount of at least $50 a month and you have up to 10 years to pay it back.
Extended Payment Plans
Extended repayment is like the standard repayment plan but you will be given a longer period of time to satisfy the loan. Normally 12 to 30 years, depending on how much you owe. This option is good if you have large student loans but remember you will be paying more interest by stretching out the term of the loan.
Graduated Payment Schedules
Graduated payment schedules are popular since most recent college graduates start out with a small paycheck that will increase over time. The payment can mirror the income increases and allow the debt to be reduced more as the income increases.’
A Payment Plan Based on Your Income
Some people also choose the income-contingent/income-sensitive repayment plan. Each year, you can have your monthly payments adjusted to an affordable level, an amount calculated using the adjusted gross income you reported on your tax return, your family size, your interest rate and the total amount you owe. As your payments increase or decrease along with your income, you'll have greater flexibility to chip away at your debt without stressing your family finances. Of course, the less you pay each month, the longer you'll have the debt.
Changing Your Payment Plan
Although you select a payment plan when you first begin repaying the loan, you can always switch if your financial situation changes. Not all plans are available for all loans, and some loans carry limits to the number of times you can switch repayment plans each year. Check with your lender for specifics.