When you are schooling, the easiest way to finance your education is to seek student loans. These loans have made higher education to be accessible to nearly everyone. What is its downfall? Just like any other type of loan, the repayment time becomes a hell of a life affair. The good thing is that when you are planning to repay your student loans, you have the option of extending the time period. It is easy to repay over a prolong time but it is also wise to repay it in lump sum if you have enough cash.
When you have decided to repay, you have a chance of choosing which repayment program. There is a student loan repayment program for those who borrowed. Availability of these programs may sometime overwhelm one because you may not know which to choose. Your financial situation should influence the type of student loan repayment program that you choose.
The available student loan repayment program includes the following;
Level Repayment Plan
One of the noticeable attribute of Level Repayment Plan is that each and every month, you will repay the same amount. You don’t have to worry about what you will pay and that is why many borrowers opt for this. The only thing that can change the amount paid per month is if there is a change in the interest rates. All in all, it is considered to be one of the cheapest student loan repayment programs to go for.
Graduated Repayment Plan
This is a plan that cost least at the start but the amount will automatically rise in future. You start by paying fewer amounts but it increases with time. It is ideal for those who have just graduated or have started their first job after graduation and they intend to further their studies. The more you advance your career, the more you will earn and that implies that you will not have any difficulties of repaying in increased amount in the future.
Extended Repayment Plan
This is a plan that is not for everyone? Why? The reason is because it’s only applicable to specific types of student loans. It is a student loan repayment program which is for those who borrowed using PLUS, Federal Stafford and consolidation loans. These loans are not available to anyone because it has its own special requirement that you must meet before you are offered. For example, you need to have borrowed using these loans or your debt balance should comply with stated figures.
Income Sensitive Repayment Plan
It is a plan that is only meant for Federal Student Loans. How much do you earn or make? This repayment program is based on the amount that you earn. A person who uses this program and earns more than you will automatically pay more in each installment than you. The only problem with this option is that it is not permanent. You must apply for the plan each year. It is also expensive.
From the look of the matter, every borrower of student loans has been given an option of choosing any plan. You should also remember that there are other programs to choose from which are not mentioned above.