Remember, not every lender treats income loan repayment the same. Under federal direct Stafford or consolidation loan, you are usually eligible for an income-based repayment plan. PLUS loans, however, are not eligible. The amount you pay annually on income-based loans differs, but it will never exceed 20% of your discretionary income -- that is, your annual gross income less an amount based on the poverty level for your household size.

Additional Repayment Options

The repayment express doesn’t stop there. There are plenty of other ways to pay your bill and shed that student loan albatross from your shoulders. Check these out and see if there’s a place for one or two in your student loan repayment plan.

Pre-Paying – There’s an old saying in the financial world that “there’s no rule that says you have to spend any raise you get at work”.

Similarly there’s no rule that says you can’t pay your long off before its full amount is due.

Both proverbs, as it were, are spot on in the sense that financial benefits come to those who think creatively. Remember, the longer it takes to pay your student loan debt, the more interest you’ll pay. You can’t do much about the amount of money you borrowed – the principal – but you can do something about the bank account-sapping interest you pay on your loan. By paying it off early, you kill those onerous interest payments. In the process you’re taking money that could have gone to the bank off the able and putting it back where it belongs. In your pocket.



Loan Snapshots: “On Time” Payments




Paying on time and regularly has hidden benefits, too. Some lenders reward regular on-time payments with interest rate reductions. That could save you thousands of dollars over the life of your loan.
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Bank Deductions

There is no shortage of lending institutions that enable you to make student loan payments automatically from your bank account. Besides being convenient, automatic bank transfers help you maintain a good credit rating by ensuring on-time payments. Some lenders may even offer a decrease in the interest rate on your student loans just by going for the automatic deduction.

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Loan Snapshots: Schedule Your Payments

You can tailor, with minimal effort, the monthly date you receive your student loan bill. For instance, if you are paid monthly on the 30th, you can ask your lender to send your bill on the first of the month. That way you should have enough on hand to pay your loan bill.