Ways to Repay Student Loans

pay loans

It is important to educate yourself about how to repay student loans could alleviate stress and financial burden But a late payment can cause serious problems. Making your monthly installments on time is much easier when you establish automatic payments that align with your salary schedule. The process of paying off loans with high interest first , or consolidating your debts will help lessen the overall burden.

It generally takes approximately twenty years to repay student loans. Luckily federal student loans offer the grace period of 180 days following earning your degree prior to when the repayment process begins. Private lenders usually do not provide this grace period but instead require you to start repaying your loan immediately following the completion of.

Although you are able to utilize the grace period or deferments as well as forbearance to put off the payment of the loan you have taken out, it’s best to start paying the loan off as quickly as you can. Check out our guide on how to pay off student loans in a hurry and for a variety of repayment options and other sources.


Payment Plans 

The kind of plan you select can have a significant effects on the amount you have to pay. While it’s tempting , you should choose plans solely based on the monthly installment amount but other aspects also deserve consideration.


Think about the whole image, including the amount of interest, the payments per month, and the length of your loan. Although the repayment plan you choose won’t affect the rate of interest on your loan however, a longer period of repayment is that you’ll eventually be paying more on interest. This calculator for repayment of loans will aid you get the full picture of how this process works.


The information on the following payment plans pertains to federal loans. Plans offered by private lenders are more flexible, and you’ll have to reach out for them individually to find out the specifics of their plans.

Loan Consolidation

Consolidation of loans allows you to reduce your financial burden by combining several loan payments every month into one loan. Consolidating your loan payments can reduce your interest rate and decrease the amount of debt you have by combining the interest rates on all outstanding loans into one fixed, fixed rate.


The federal government permits students to consolidate a variety Federal loans excluding the loans to private schools. It is also not possible to consolidate Direct PLUS loans that parents take out to finance an education for a dependent child. You can however consolidate loans later repaid by the parent. Loan consolidation programs have different rules.


In order to consolidate your debts you have to complete and submit an Federal direct consolidation loan application along with a promissory note, and then sign a contract to pay the new Direct Consolidation Loan through the Federal Student Aid’s portal online.

How to Navigate Financial Hardship

The requirement to make regular payments to the loan can be a strain on your financial health, particularly when you are in a time of financial stress. If you are injured or lose your job suddenly or lose your job, you might find it difficult to meet your obligations to your lender and remain financially viable. You can avoid the possibility of defaulting in repayment of your loan making use of the financial options available to you like forbearance or deferment.

Financial hardship options can delay the financial strain immediately, however there are pitfalls. While deferred and forbearance options may delay or stop loans however, they are not able to stop the accrual of interest. That means that you could have to pay more in interest on the loan interest due to the delay in your payment.


The rules for forbearance and deferment are only applicable for federal loans. Private lenders can provide assistance for students in financial hardship however, they cannot allow them to delay or ask for forgiveness for loans.


  • In the case of Forbearance, The option of forbearance lets you drastically reduce or stop the payments on your federal loan for a limited time (typically less than one calendar year) and then make the missed or reduced payment in one lump amount later. The interest will continue to accrue throughout the period.
  • Debt deferment The deferment option for student loan permits you to reduce or postpone payment over three or more. The interest is typically not charged during the deferment period. Candidates need to explain the life circumstance that warrants deferment to be eligible.

Loan Forgiveness or Cancellation

Students may have their loans cancelled or forgiven for a variety of reasons. For instance, those working in jobs with low incomes and that serve communities in need like mental health counselors or teachers or who have recently pulled out from institutions that are no longer in operation are eligible for the forgiveness of loans.

The following list provides the most commonly used kinds of student loan cancellation or forgiveness. Click this page for more kinds that forgive loans.

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