Student Loan Repayment

Choosing the best plan for you

Some people like finance, others find it boring. Either way, you need to learn about the requirements for paying back your loan. Paying attention and paying on time will make your financial life easier in the future.

Around graduation, you should get information from your lender about when you need to start paying back your loan. You can choose which payment option you'd prefer at that time for federal direct loans. Private loan repayment is chosen at the time you apply and these loans typically have fewer options, so ask your lender if you have questions.

Types of Federal Direct student loan repayment plans

With Federal Direct Loans you’ll have the following repayment options:

  • Standard. You pay the same amount each month until the loan is paid off. The standard term for paying off a federal loan is 10 years.
  • Extended. Just what it sounds like. The extended plan lets you pay less each month over a longer period, up to 25 years. That means you'll be paying more total interest, so it costs you more than if you’d paid it off sooner.
  • Graduated. You start by paying a low amount each month, which is then increased every two years. Ideal if you expect your income to steadily rise.
  • Income-based repayment (IBR). This plan caps monthly payments at a rate that's affordable for you. You qualify based on your income and the total amount you owe.
  • Income-contingent. This plan also changes how much you pay depending on how much money you make.

If you don’t pick a different option, you'll be automatically put into the standard repayment plan.

Direct Loans offer a 0.25% interest rate reduction when you sign up for automatic payments. An automatic debit option deducts your payment from your personal checking or savings account. This way, your loan is paid each month, on time, while you’re doing stuff that’s more fun.

If you have federally guaranteed loans, you can access your loan information online, through the Department of Education's National Student Loan Data System. Use this to review your loan, how much you still owe, and when it will be paid off.

Private Loan Repayment

For private loans you choose your repayment option when you apply for the loan. Typically, you’ll have these options:

  • Immediate. You need to start making principal and interest payments right away.
  • Interest-only. Interest payments are required while you’re enrolled in school. Payments on principal are deferred (put off until you graduate or leave school).
  • Deferred. Payments are not required while you’re enrolled at least half-time. Interest does accrue and will be added to your loan.

All of the above are available options with our Citizens Bank Student Loan™.

Additional student loan and college planning resources

Postpone Student Loan Payments: Reasons for Deferment
Details About a Master Promissory Note
How Does Stafford Loan Repayment Work?
How Does Private Loan Repayment Work?
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