Congratulations to all the recent college graduates! Now it’s time to start reaping the rewards of your hard work – starting a career, getting your first apartment … and paying off your student loans.
You’re not alone, almost two thirds of graduating college seniors have student loans and the average loan amount is over $23,000. For those graduating from private schools and those getting advanced degrees, the numbers are even higher!
As you build your budget to include repaying your loans, there are a few things to keep in mind:
What type of repayment plan will you have? Many loan programs allow you to defer starting the repayment process until you graduate and then have level payments for up to ten years to pay off the loan. Depending on the type of loan you have and your situation, you may be able to extend the term or have variable payments.
What are the terms (repayment and interest rate) of your loans? As you review your loans, be sure to compare the student loan rate with any other borrowing you may have. For example, it may sound nice to pay off your student loans just to get it behind you, but if that means that your credit card balance would grow, it may not make sense.
Would consolidating your loans or refinancing them make sense? Again, you need to review all of the terms of any existing loans with the terms of a potential consolidated loan. Be sure to consider rates, terms and any costs of consolidating or refinancing.
What if you are having trouble making your required payments? Living up to your repayment responsibilities is serious. Missing payments may trigger penalties and ultimately that may be reflected on your credit record. If an issue arises, contact your lender immediately. You may be able to work out an agreement to extend the repayment period or change the terms to ease the burden. Your lender does not want to see the loan go into default and neither do you.
No matter what your stage of life, we have the checking account for you. Students – check out our Student e-Checking; ‘Graduates’ – take a look at our e-Checking account. Both accounts offer many time and money saving benefits including no monthly balance or service charge; free online and mobile banking; and free online bill pay.