Questions About Loans You Must Know the Answers To

The Benefits to Student Loan Forgiveness

You may not know that there is such a thing as student loan forgiveness. Because of the advantages it gives to borrowers, many schools to today are getting this new program. Those who take advantage of student loans will benefit from this student loan forgiveness program. With the student loan forgiveness it is possible to consolidate all your federal student loans into one new loan. And because of this, the borrower will be able to choose a repayment plan that is affordable for them. There are many repayment plans that students can pick from; however, here are only 3 repayment plans and their benefits.

The standard repayment is the first repayment plan. Each month, the borrower is allowed to pay the same amount in this repayment plan. In this type of repayment you can’t increase or decrease your payments but stays as is until the loan is paid off. The amount borrowed, the interest rate, and the terms of the loan will determine the fixed monthly repayment amount. The standard payment is beneficial as you can know how much money you have to save to be able to pay the loan every month, and not just try to guess the payment. This is true because the standard payment is the same for each month you pay back the loan.

Another type of repayment plan for student loans is the graduated repayment plan. The repayment plan is graduated meaning that at the start the payment is a lower rate but when the schools years go on, it gradually increases. Every two years the monthly repayments will increase in amount. This is great for those who cannot pay a big amount in the first year of the loan. There is no need to worry if a student has a low budget at the start of the student loan forgiveness. As the years go on, the student can save money and increase the repayment amounts.

The pay as you earn plan is the third repayment plan. The advantage of pay as you earn plan is that it has the lowest monthly payments. In this plan you pay only ten percent of your monthly income. But, this repayment plan is not for everybody because to be eligible for this repayment plan you have to pass certain qualifications and specifications that you have to undergo. The pay as you earn plan is for you if you pass the qualifications and specifications. The monthly payment will be really, really cheap. Again, this is the cheapest but the most difficult repayment plan that you can get with the student loan forgiveness.

Suggested Post: about his