Upon graduation you will be presented with a diploma to acknowledge all your hard work. For those with student loans you can also expect to receive a repayment schedule from your loan servicer. Depending on the type of loan you borrowed you might be expected to begin repayment immediately or you could have a grace period that is typically around 6-months after you dropped below half-time enrollment, or graduated.
Student Loan Repayment
Student loans enter repayment when you graduate or drop below half-time enrollment. When the repayment begins will depend on the type of loan you borrowed. Most federal student loan borrowers will get a grace period after they enter repayment before their first payment is due. Expect to be sent a repayment schedule from your loan servicer with your monthly payment amount, due date, number of payments expected to successfully pay off the loan and any other pertinent information needed to make monthly payments.
Grace Period by Loan Type:
A grace period is time given after leaving school and before your first student loan payment is due.
- Federal Direct Subsidized and Unsubsidized Loans get 6-months Federal PLUS Loans for parents do not have a grace period.
- Parents with PLUS loans can request a 6-month deferment for after the student benefitting from the loan drops below half-time enrollment. This will mimic a grace period, but it’s not technically a grace period.
- Federal Graduate and Professional students with PLUS Loans will get a 6-month grace period.
- Federal Consolidation Loans do not have a grace period. If a loan in its grace period is moved into a federal consolidation loan, the remaining grace period is forfeited.
- Private Student Loans can range from payment, interest-only payments while in-school, being due right away after leaving school and can be as much as 6-months. Check with your lender to know which applies to you.
Understanding your Monthly Student Loan Payment
When you receive your student loan repayment schedule you will be given the current outstanding principal balance of the loan. If you had an unsubsidized loan or a private loan, and deferred payments while in school, this amount would include accrued interest while you were attending school. This means that the number you see will be more than the amount you initially borrowed due to the added interest. This happens because your lender will likely capitalize (add) outstanding accrued interest to the original principal balance of your loan.
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Your student loan servicer will also provide you with a schedule of payments, showing how many payments are needed to pay off the loan given the current balance and interest rate of the loan. Many loan servicers will work out the payment, such that the loan (with interest) will be paid off in the standard 120 payment or 10-years. That said, repayment periods can vary. If you have a private student loan, your repayment terms will reflect the time frame agreed upon at the time you accepted the loan. If you have a federal student loan, you can choose one of the federal student loan repayment plan options. You will also have the option to change your repayment plan during your repayment term.
Paying Down your Student Loan Debt
The idea of paying on loan for the next decade can be daunting but there are ways to shorten the time needed to pay off your student loan. Some suggestions include:· Make your payments early each month. Paying down the balance, even a few days earlier each month, will save on the amount of interest accrued that month. It might not seem like much at first but over time this could make a difference and shave months off the repayment period of your loan.· Pay extra each month or make extra payments whenever possible. This will again reduce the amount of interest you pay overall and ultimately reduce the cost of the loan allowing it to be paid in full sooner than planned.
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Managing your Student Loan Debt
Life happens and you could very well find yourself facing financial hardships at the end of your grace period unable to figure out how you are going to pay for your loans. For federal student loan borrowers, the US Department of Education offers income driven repayment plans for qualifying loans to help out their financial situation. There are also several student loan forgiveness programs, such as Public Service Loan Forgiveness, for students that enter specific areas of employment post -graduation. Those students that qualify could find their loans forgiven after certain criteria is met.
Refinancing your Student Loan to Save Money
If you find it difficult to pay extra or even to pay the monthly payment on your student loan(s) there are options. If all your loans are federal Direct Loans, you could consolidate them into a Direct Consolidation Loan. This will not reduce your interest rate or the amount you owe, but if you are paying the minimum payment on multiple loans, it is possible the cumulative loan payment could be less than several individual payments.
Another option would be to consider a private student loan refinance. Here you could bundle several loans into one and you could possibly reduce your interest rate which would lower your monthly payment or allow to make fewer payments. If you have federal loans and are considering a private student loan refinance, please keep in mind, that once you move your loans out of the federal loan program, you will no longer have access to or be eligible for the benefits provided to federal student loan borrowers.
Best Student Loan Refinance Lenders
College Ave Student Loans
- Variable rate range: 3.44% – 7.99% APR1
- Fixed rate range: 3.99% – 7.99% APR1
- No application or prepayment fees
- Apply in 3 minutes or less for instant credit decision
College Ave Student Loans products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or M.Y. Safra Bank, FSB, member FDIC.. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
1The 0.25% auto-pay interest rate reduction applies as long as the borrower or cosigner, if applicable, enrolls in auto-pay and authorizes our loan servicer to automatically deduct your monthly payments from a valid bank account via Automated Clearing House (“ACH”). The rate reduction applies for as long as the monthly payment amount is successfully deducted from the designated bank account and is suspended during periods of forbearance and certain deferments. Variable rates may increase after consummation.
2This informational repayment example uses typical loan terms for a refi borrower who selects the Full Principal & Interest Repayment Option with a 10-year repayment term, has a $40,000 loan and a 5.5% Annual Percentage Rate (“APR”): 120 monthly payments of $434.11 while in the repayment period, for a total amount of payments of $52,092.61. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
3$5,000 is the minimum requirement to refinance. The maximum loan amount is $250,000 for those with medical, dental, pharmacy or veterinary doctorate degrees, and $150,000 for all other undergraduate or graduate degrees.
Information advertised valid as of 8/11/2022. Variable interest rates may increase after consummation. Approved interest rate will depend on the creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of full principal and interest payments with the shortest available loan term.
ELFI Student Loan Refinance
- Customers are saving an average of $309 every month and an average of $20,936 in total savings after refinancing their student loans with Education Loan Finance1
- Variable and fixed rates starting from 2.48% APR and 4.29% APR2
- Prequalify in as little as two minutes
- Award winning customer service from your dedicated Student Loan Advisor who is matched to you from the moment you sign up
1Average savings calculations are based on information provided by SouthEast Bank/ Education Loan Finance customers who refinanced their student loans between 8/16/2016 and 10/25/2018. While these amounts represent reported average amounts saved, actual amounts saved will vary depending upon a number of factors.
2Rates accurate as of 9/23/22. The interest rate and monthly payment for variable rate loans may increase after closing. Your actual interest rate may be different from the rates shown above and will be based on the term of your loan, your financial history, and other factors, including your cosigner’s (if any) financial history. For example, a 10 year loan with a fixed rate of 6% would have 120 payments of $11.00 per $1,000 borrowed. To qualify for refinancing or student loan consolidation through Education Loan Finance, you must have at least $10,000 in qualified student loan debt and must have earned a bachelor’s degree or higher from an approved post-secondary Education Loan Finance institution. Education Loan Finance Parent Loans are limited to a maximum of the 10-year term.
SoFi Student Loans
- Rates as low as 3.24% variable and 3.99% fixed1
- No fees or prepayment penalties
- Unemployment protection
1Fixed rates range from 3.99% APR to 8.24% APR with a 0.25% autopay discount. Variable rates from 3.24% APR to 8.24% APR with a 0.25% autopay discount. Unless required to be lower to comply with applicable law, Variable Interest rates on 5-, 7-, and 10-year terms are capped at 8.95% APR; 15- and 20-year terms are capped at 9.95% APR. Your actual rate will be within the range of rates listed above and will depend on the term you select, evaluation of your creditworthiness, income, presence of a co-signer and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. This benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. The benefit lowers your interest rate but does not change the amount of your monthly payment. This benefit is suspended during periods of deferment and forbearance. Autopay is not required to receive a loan from SoFi.
Splash Financial Refinance Loan
- Rates as low as 2.49%1 Variable APR and 3.29%1 Fixed APR
- No pre-payment penalties, origination, or application fees
- See rates in 3 minutes without affecting your credit score2
1The rates displayed may include a 0.25% autopay discount.
2To check the rates and terms you qualify for, Splash Financial conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, the lender will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
Earnest Student Loan Refinancing
- Variable rates starting at 2.49% APR (including 0.25% Auto Pay discount)*
- Fixed rates starting at 3.74% APR (including 0.25% Auto Pay discount)*
- Choose your own monthly payment
- No fees of any kind and exceptional customer service for the life of your loan
- Check your rate in under 2 minutes
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Actual rate and available repayment terms will vary based on your income. Fixed rates range from 3.99% APR to 8.74% APR (excludes 0.25% Auto Pay discount). Variable rates range from 2.74% APR to 8.24% APR (excludes 0.25% Auto Pay discount). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once per month. The maximum rate for your loan is 8.95% if your loan term is 10 years or less. For loan terms of more than 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95%. Please note, we are not able to offer variable rate loans in AK, IL, MN, NH, OH, TN, and TX. Our lowest rates are only available for our most credit qualified borrowers and contain our .25% auto pay discount from a checking or savings account.
*Auto Pay Discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance. Not all borrowers will qualify for our lowest rates, and your rate will be based on creditworthiness at time of application.
The information provided on this page is updated as of 8/25/2022. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice.
Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 303 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, e-mail us at [email protected], or call 888-601-2801 for more information on our student loan refinance product.