Are There Alternatives to the Standard Repayment Plan for Student Loans?
When it comes to your student loans, the standard repayment plan entails a number of fixed payments over a 10-year period. Along with taking out a personal loan, which may offer lower interest rates than your current student loans, the following are a few alternatives to standard repayment.
Graduated Repayment Plan
Similar to the standard plan, this plan aims to have student loans paid off in 10 years time. Payments do increase every two years, and the increase will be based on the amount needed to meet the projected end date. All borrowers are eligible, but you may end up paying more money than with the standard plan.
Revised Pay as You Earn Repayment Plan
Also known as REPAYE, your monthly payments are calculated by taking 10% of discretionary income, which is your annual income minus 150% of the current poverty guideline for your state and family size. Loan forgiveness occurs when you have an outstanding balance for 20 or 25 years, depending on whether you pursued graduate studies. However, you will be responsible for paying the income tax on debt that’s been forgiven.
Income-Based Repayment Plan
If you’re struggling to repay your student loans, this might be the plan for you. Your payments will be comprised of either 10% or 15% of your discretionary income, and your income status will be reviewed each year to see if an update is necessary. Monthly payment amounts will never exceed those associated with the standard plan, and loan forgiveness, with a tax obligation, is also available.
If you want to discuss personal loan options to help you get a handle on student loans, Spirit of America Federal Credit Union in Lincoln, NE, is here to answer your questions. They’ll work with you to secure an affordable personal loan, and will also ensure your rates and terms are reasonable. They also offer many other services, including checking and savings accounts, auto loans, and help with mortgages. Get started on your personal loan application today by visiting their website; or, call (402) 467-1102 for more information.
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