 |
Debt Management Notes
(links to our financial modules) |
|
|
|
|
 |
|
| 1 |
Advantage:
Make Only One Payment |
| • |
The key advantage
for student loan consolidation is
making one single
payment instead of multiple
payments each month. |
| • |
That means
less paperwork, less
chances of missing a deadline,
less writing payment checks, etc.
|
| • |
You will be consolidating
all of your student loans under
one program. |
| 2 |
Advantage:
Select Your Repayment Term |
| • |
Depending on the
amount being consolidated, you
can stretch your repayment term
by up to 30 years (see table below). |
| • |
Lengthening
the term of your loan will significantly
reduce your monthly payment,
although you should note that your
extended repayment term will increase
the total amount of interest you
pay on your loan.
|
| • |
But
since there are no prepayment penalties,
you can reduce your interest costs
by increasing the amount you pay each
month or by paying off your loan early
— without a penalty or fee. |
| Total
Student Loan Debt |
Maximum
Repayment Term |
| $10,000
to $19,999 |
up
to 15 years |
| $20,000
to $39,999 |
up to 20 years |
| $40,000
to $59,999 |
up to 25 years |
|
$60,000 and greater |
up to 30 years |
| 3 |
Advantage:
Choose from (4) Plans |
| • |
You can select
the repayment plan that fits your
budget. Take a look at these options: |
Level
Repayment Plan |
Best
suited for a borrower whose goal is
to take charge of repayment through
streamlined single-billing convenience
and a fixed interest rate. It is also
the most commonly used plan.
- Fixed monthly payment for duration
of the loan.
- Monthly payments credited to
principal and interest.
- Lowest overall interest cost
of the various repayment options.
|
Graduated
Repayment Plan |
Best suited
for borrowers whose immediate earnings
are low but are expected
to rise steadily in the years ahead.
Two year graduated
plan:
- Low, mostly interest payments
over the first two years of repayment.
- Principal and interest payments
begin in year three of repayment.
Four year graduated
plan:
- Low, mostly interest payments
over the first four years of repayment.
- Principal and interest payments
begin in year five of repayment.
|
| Income
Sensitive Repayment Plan |
With this plan, your payments are
based upon your income and are adjusted
annually. It's
best suited to those with extreme
financial problems who may
be in danger of default:
- Payment obligations are calculated
based on current income level
and are adjusted annually based
on expected total income.
- Payments must cover the interest
that accrues between scheduled
payments.
- Higher finance charges over
the life of the loan.
|
| Extended
Repayment Plan
|
Best suited
for borrowers who are consolidating
between $30,000 and $39,999 in debt,
and wish to reduce their
monthly payment further, but only
qualify for a repayment term of
20 years or less:
- Low fixed or interest-only payments.
- An extended repayment term of
up to 25 years.
|
|
|
|
