What types of repayment plans are available with consolidation?

Repayment plans with student loan consolidation

If you’ve recently graduated from college, chances are you’re going to soon see student loan bills piling up. In order to lower the payment into something more manageable, you’ll need to pick the right type of repayment plan. The following are a few financial repayment options:

• Level Payment Plan: Your monthly payment is the same for the entire loan term.

• Graduated – Level 2 Payment Plan: For the first two years, you pay only interest. Beginning with year three, your student loan repayment increases to include interest and principal.

• Graduated – Level 5 Payment Plan: Interest is only paid in the first two years. Your student loan repayment increases to include interest and a portion of the principal in year three. In the sixth year, you pay regular interest and principal payments.

• Income Sensitive: Your payments are less in the beginning and increase as your income grows.

• Extended Repayment Plan: This might apply to you if you have loans that were first disbursed on or after Oct. 7, 1998. You may be eligible to extend your repayment term up to 25 years.

As you can see, there are many different types of repayment plans available to those who are repaying student loans. Be sure to examine all available options and find the plan that best suits your needs.