During college, you can choose to set up your federal student loans so they are deferred, which means you don't need to make payments until you finish school or drop below part-time status. Most federal loans are deferred, but if you obtain a private student loan, you will also have the choice of immediate or interest-only repayment until graduation.
After you graduate college (or leave school), you'll typically have a grace period before you enter your student loans' repayment period. At this point in time, you'll need to begin making regular monthly payments toward the principal and interest of your student loans. Learn more about student loan repayment options below.
Most lenders offer a number of repayment options. With our Citizens Bank Student Loan you can choose between three different repayment options, with the ability to prepay on your loan without triggering full repayment or a prepayment penalty. The following are three standard options most lenders offer to repay private student loans:
It's important to closely read and understand the language in your loan's promissory note, since it governs terms and conditions of private student loan repayment.
Lenders will most likely notify you before repayment should begin and you'll usually have a period of time between 10 and 25 years to pay off your private student loan. Remember, as the borrower, you are responsible for knowing when your payments are due, regardless of whether or not you've been reminded. Failure to pay in a timely manner can lead to credit problems, student loan forbearance or even loan default.
Citizens Bank helps you make wise choices by providing student loan repayment information. Visit our student services page to learn more about repayment options on our Citizens Bank Student Loan. If you still have questions, call an Education Finance Specialist at 1-888-411-0266, and we'll help walk you through the process.
Among the many attractions of a Federal student loan is the flexibility it offers in repayment terms. You won't be required to begin repaying your Federal student loan until six months after you either graduate or drop below half-time student status. However, for unsubsidized Federal student loans, interest will begin accruing on the loan while you are still enrolled in school. Learn more about the Federal student loans repayment plans you can choose from with Direct Stafford Loans below.
Under this plan you are required to pay a fixed amount each month until the loans are paid in full, with up to ten years to repay. Monthly payments must be at least $50.
Offering a fixed, annual, or graduated repayment amount, the student loan repayment period on this plan doesn't exceed 25 years. The fixed monthly payment is lower than under the standard plan, but the total that is repaid is higher, because interest accumulates for a longer time.
With this structure payments are lower at first, covering at least the interest that accrues between payments. However, your payments are then ratcheted up every two years, during which time your income will presumably be increasing. Federal student loan repayment is accomplished in a period of up to ten years.
With this affordable way to repay a Federal student loan, monthly payments are capped at an amount based on your family's size and income. You are eligible for IBR if the monthly student loan repayment amount under IBR will be less than the monthly amount calculated under a 10-year standard repayment plan. If you choose to pay back your college loans under the IBR plan for 25 years, you may be eligible to have your loan balances cancelled at the end of that time. This also applies to anyone who works in the field of public service for 10 years.
You can find helpful information about repayment and financing options by visiting our student services page. Or, learn more about our Education Refinance Loan, which allows borrowers to consolidate private and federal loans into one new loan. If you still have questions, call an Education Finance Specialist at 1-888-411-0266, and we'll help walk you through the process.
Your student loan's repayment is important. Experts in college finance warn that no one should take their obligation to repay a federal student loan lightly. Failure to pay, or defaulting on your federal student loan, can have serious consequences for your financial reputation and credit score, just as it would for any other debt. Under certain circumstances you may qualify for a short-term federal student loan deferment. They include:
Generally speaking, if your underlying federal student loan was subsidized, interest will not continue to accumulate during the federal student loan deferment period. To find out more about federal student loan deferment please visit the Federal Direct Loans website or check with your federal student loan lender or servicer.
Find out more about our affordable financing options and helpful student financing resources. Also, learn about our Citizens Bank Student Loan. If you have additional questions about financing options from Citizens Bank, call an Education Finance Specialist at 1-888-411-0266, and we'll help walk you through the process.
When you're thinking about the structure of your student loan repayment, keep in mind you can make early payments no matter what plan you choose. Most students take the maximum period allowable to pay back their student loans, with some even applying for deferments when they encounter trouble making payments. But for other thrifty students, the idea of paying thousands of dollars in student loan interest on top of their original loan can be unsettling.
If you're worried about how your interest rate will affect your private student loan repayment, you may be thinking about paying your private student loan off early. Most private student lenders don't charge a prepayment penalty, allowing you the flexibility to start paying more whenever you want. Plus, starting payment in school or before the end of your grace period won't trigger full repayment responsibilities. Check out some of the strategies you can employ to pay off private student loans early, thus limiting the amount of interest you'll pay over the life of the loan.
Federal student loans include a provision that allows you a grace period during which you're not required to begin repayment for a certain period after graduation. For Federal Stafford Loans, that grace period is six months, and for Federal Perkins Loans, it's nine months. If you land a post-graduation job before that grace period kicks in, why not begin paying your loan earlier than you're required to?
Remember that the interest on federal student loans accrues, or builds up, on a daily basis. So paying earlier in the monthly cycle will shave a little off your outstanding principal, which in turn reduces the total accumulated interest. You can also pay a little extra each month as long as you make sure to apply it to the principal.
At various times, you may come into money that was completely unexpected. Perhaps you receive an inheritance from a grandparent, a bonus at work or get an unexpected tax return. Rather than spending that money, why not consider using it - or at least a portion of it - toward your student loan's repayment? Some people also choose to use any pay raises they receive to pay down their student loans more quickly.
Another option to help reduce your overall student loan debt is to make interest-only payments while in school. The Citizens Bank Student Loan offers this choice as a repayment option. To learn more about our Citizens Bank Student Loan, call an Education Finance Specialist at 1-888-411-0266, and we'll help walk you through the process.
In the context of federal student loans, the word forbearance means a temporary postponement of, or reduction in, payments for a certain period, due to the borrower's financial difficulties. It is not to be confused with loan forgiveness because you still have to pay your remaining loan balance; you are simply delaying it for a time. Some borrowers receive student loan forbearance after unsuccessfully seeking a deferment.
Unlike deferments, federal student loan forbearance means interest will continue to accrue on your loans, whether they are subsidized or unsubsidized. Despite being granted federal student loan forbearance, you're still responsible for paying that interest.
Federal student loan forbearance—which is granted in one-year intervals, for up to a total of three years—can help the borrower avoid delinquency or default. To qualify, you must apply to your federal loan servicer and continue to make payments until you've been formally notified that your request for forbearance has been granted.
During the period of federal loan forbearance, you will continue to receive quarterly statements that outline the interest that has accumulated on your loan. If you do not pay that interest, it will be added to your loan's outstanding principal amount.
There are certain circumstances in which lenders are mandated to grant you forbearance of your federal student loans. They may include:
We want to help you find the financing you need, as well as the student budgeting resources and convenient bank accounts that meet the needs of busy students like you. If you need help financing additional education pursuits, find helpful information about our affordable Citizens Bank Student Loan. If you have more questions, call an Education Finance Specialist at 1-800-708-6684, and we'll help walk you through the process.