Repaying Your Loan
There are six repayment options:
- Payments that stay the same each month (standard)
- Payments that rise gradually (graduated)
- Payments that are linked to your income (income-sensitive)
- Payments that stretch over a longer period of time (extended)
- Payments designed for those who take lower paying, public service jobs (income-contingent)
- Payments based on economic hardship that are linked to your income (income-based)
You’ll usually have up to 10 years to repay your loan, but you could have as long as 25 years, depending on your repayment plan. To learn more, visit EdFund’s Loan Repayment Calculator, or the U.S. Department of Education Federal Student Aid Gateway Website.
Your Monthly Payment
Borrow conservatively, budget wisely and plan ahead. Knowing the monthly payments for the amount you borrow is a great start:
| INTEREST RATE |
6.80% |
7.90% |
|
| TOTAL AMOUNT BORROWED |
NO. OF PAYMENTS |
PAYMENT |
TOTAL INTEREST |
PAYMENT |
TOTAL INTEREST |
| $3,000 |
70 |
$52 |
$643 |
$54 |
$754 |
| $5,000 |
120 |
$58 |
$1,905 |
$60 |
$2,248 |
| $8,000 |
120 |
$92 |
$3,408 |
$97 |
$3,597 |
| $10,000 |
120 |
$115 |
$3,810 |
$121 |
$4,496 |
| $16,000 |
120 |
$184 |
$6,096 |
$193 |
$7,194 |
| $20,000 |
120 |
$230 |
$7,619 |
$242 |
$8,992 |
| $25,000 |
120 |
$288 |
$9,524 |
$302 |
$11,240 |
| $35,000 |
120 |
$403 |
$13,334 |
$423 |
$15,736 |
| $45,000 |
120 |
$518 |
$17,143 |
$544 |
$20,232 |
| $60,000 |
120 |
$690 |
$22,858 |
$725 |
$26,976 |
Making Repayment Easier
- Pay as you go. Deferring interest payments on your loan may be attractive in the short run, but you'll pay a lot more in the long run. By paying as little as $20 each month, you can save hundreds of dollars over the life of your loan.
- Sign up to have your loan payments taken directly from your bank account Many lenders will lower your interest rate if you make automatic payments or always pay on time.
- See if loan consolidation makes sense. If you have several federal loans, you may want to consider consolidating them into a single new loan with a new interest rate and an extended repayment term of up to 30 years. Keep in mind that loan consolidation isn’t right for everyone.
- Let your lender know if you can’t make your payments. If you fall behind, your delinquency most likely will be reported to a national credit agency, which could damage your credit rating, making it harder and more expensive if you want to get a loan for a car, home or more education later. Ask your servicer about changing your repayment plan, consolidating or combining your loans, or look into a deferment or a forbearance to temporarily postpone, reduce or extend your payments.
Don’t default. If you don’t repay your loan, you’ll face serious consequences:
- You’ll lose the privilege of making monthly payments; the entire amount of your loan will become due.
- You’ll no longer be eligible to receive any more federal financial aid (grants or loans).
- A portion of your paycheck or tax refund may be taken to pay back your loan.
- You may be hit with collection costs.
- You may not be eligible for certain government jobs.
- You’ll damage your credit rating, making it harder and more expensive to borrow money in the future.
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