There are a number of repayment options you can choose from after consolidating your student loans. Not only can you select terms that allow you up to 30 years to repay the balance but the amount you pay each month can be established. These are very similar to options you selected when you started the repayment period on your student loan and include:
1. Standard repayment plan – equal payments over a 10 year period.
2. Extended repayment plan – equal payment over a longer period, up to 30 years.
3. Graduated repayment plan – over a period of up to 30 years, payments start out low and gradually increase.
4. Income Contingent repayment plan – monthly payments determined based on your income (periodically reviewed) and paid over a period of up to 25 years.
Once you begin repayment on your consolidated student loan, you have options on how you make your monthly payment which include an automatic electronic debit from your bank account or mailing a check each month. An electronic debit means that you will no longer receive paper statements in the mail and may qualify you for an interest rate deduction of 0.25 percent.
|Jennifer Mathes, Ph.D.|