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

For students who are 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. Expect that after graduation, you’ll need to have cash to cover the costs of repaying your student loans. It will be much easier if you only have one student loan, but if you have multiple student loans, then that will be harder. It is really confusing thinking that you need to deal with different agencies, and sometimes you won’t even know the amount you owe and when you should need to pay. The good new is that repayments can be simplified with a small dose of organization, and all you need to do is to get the necessary information so you can write it down or just create a direct debit account so the payment will just be automatically taken out.

One way to best reduce the amount of your loan is through the Obama Student Loan Forgiveness or Federal Direct Loan Program. This program is offered for all types of federal student loans and does not apply to private loans. There are a lot of benefits a borrower can get by taking advantage of Obama Student loan Forgiveness such as the ability of consolidating all federal student loans into just a single new loan, and the consolidated loan can be repaid using a preferred repayment plan which is more affordable. Obama Student Loan Forgiveness Program offers repayment options including standard repayment, graduated repayment, income contingent, income based, and pay as you earn. Standard repayment refers to the processing of a payment with fixed amount in the entire duration of the loan as determined by the interest rate, amount of the loan and its terms. With graduated repayment, you can make lower payments, lower than the standard repayment plan but there is a gradual increase in the amount every two years. The borrower makes payment basing on his income in an income contingent plan, as well as basing from the interest rate, loan balance, and family size. For income-based repayments, the amount of loan balance and interest rate are not considered, but rather strictly the income and family size or 15% of their discretionary income. PAYE or Pay as You Earn repayment has the lowest monthly payment basing on the borrower’s income or ten percent of the discretionary income.

It will really help you a lot knowing the grace period of your student loan. It ranges from six to nine months and it depends on the type of your loan. It gives you more time to find money to pay your loan. Indeed, you don’t have to stick to standard or traditional repayment methods because there are a lot of options out there, feel free to check our website for more information.