If you are considering consolidating your student loans, it is important to understand the repayment options that are available to you.
Standard Repayment Plan
This repayment plan allows you to repay your student loan debt in the shortest amount of time. Your monthly payments will be slightly more than the payments required under other plans, but you will save money by paying the least amount of interest over the full term of your loan.
Most student loan servicers use the Standard Repayment Plan as the default option if you do not select a different plan. Your monthly payments will be a fixed amount, with a minimum monthly payment of $50. The term of your repayment plan will be between 10 and 30 years for Direct Consolidation Loans and FFEL Consolidation Loans.
Graduated Repayment Plan
The Graduated Repayment Plan is beneficial for borrowers who do not have strong finances initially, but who will have their income increase over time. Your monthly payments start out low and are increased every two years. The term of the loan is between 10 and 30 years for Direct Consolidation Loans and FFEL Consolidation Loans. The amount of your monthly payment will never be lower than the amount of interest that accrues between your payments or more than three times greater than any other payment you have made on the loan.
Extended Repayment Plan
The Extended Repayment Plan was created to help borrowers who need to make a lower monthly payment over a longer period of time. Your payments under this plan are a fixed or graduated amount made over a period of 25 years. The amount of your monthly payment is typically lower than they would be under the Standard or Graduated Repayment Plans.
For more detailed information on student loan repayment plans, please read our blog titled “Income-Based Options for Student Loan Borrowers.”
For your student loan, bankruptcy, foreclosure, and debtor’s rights matters, contact DeLadurantey Law Office, LLC at (414) 377-0518. We serve the counties of Milwaukee, Waukesha, Kenosha, and Racine, including such areas as Milwaukee, Merton, Delafield City, Waukesha City, and Kenosha. Visit our web site and like us on Facebook.