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Different Ways to Pay Off a Student Loan

The desire to find financing for your college education often clouds the reality on the size of the debt you are about to undertake. Often times, a graduate is overwhelmed by the payments that are due and it can be a real drain on a newly employed person to start off under the strain of such a hefty debt.

Luckily there are several different ways to repay student loans that don’t involve sinking your entire paycheck into your debt obligations leaving nothing left over for your hard work.

Consider Consolidating Your Student Loans

If you have student loans you have probably been offered consolidation services in the mail. Consolidated loans usually have lower interest rates and lower monthly payments which make them easier to handle. It is important to note that if you haven’t graduated as yet you don’t qualify to consolidate and if you are still in your six month grace period after graduating you may be able to secure a better interest rate.

Choose Your Payment Plan Wisely

If you have the option to change your payment conditions or you are just choosing your repayment options on Federal Student Loans it makes sense to think through them carefully. Several different payment plans exist from a standard arrangement that requires a fixed monthly payment for 10 years to other more flexible options such as; extended repayment which lengthens the loan term, graduated repayment which starts off with lower monthly payments and then increases slowly.

Find an Employer Who Will Pay Them for You

This might sound like a dream come true, but actually many job offers come complete with employer assistance on student loans. If the job offer does not include this perk and you are confident of your bargaining position try to negotiate to have it included. Having an employer contribute a portion towards your monthly student loan payment can be a big help financially.

Apply for Student Loan Repayment

The US Federal Government offers several programs that offer to repay student loans in exchange for volunteer service. Your student loan can literally disappear if you are approved for one of these programs but you also need to consider that the amount that was repaid may be considered income under federal tax laws. This means that you need to prepare to pay taxes on the repaid amount as if you had received it in income. This may be a small price to pay for getting rid of the loan in its entirety but nevertheless you need to be able to pay it when it falls due.


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Comments

scheng1 wrote on December 29, 2014, 7:29 AM

The problem with most graduates is to get a permanent job. It's quite impossible for them to find an employer to pay loan for them.