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Student Loan Payback

October 20th, 2006 at 10:15 am

Today I start the repayment of my student loans. This is the 2nd biggest debt I have other than the mortgage. For 15 years I will be paying ~$82.00 a month, but there some easy ways to getting that amount cut. 1st (the easiest one) is to auto-debit your account for .25% reduction. 2nd After 24 on time payments you will receive a 1% reduction on your rate. Currently my consolidated rate is 4.875%, but when I add the reductions it goes down to 3.625%. Easy things like that could save you a ton of money. Another great thing is that the most of the interest paid on the loans will be tax deductible. I think that when you have a full time job you should try to add some extra principle to your payments so you can get rid of your student loans as quickly as possible (Huge credit score boost).

Don’t be dumb and try to postpone your student loan debt. On my repayment schedule sheet it boldly says “Please remember that failure to repay your loan according to its terms and conditions may result in reporting the loan to a credit bureau as default, and may result in any or all of the following:

1. Loss of Federal and/or State income tax refunds
2. Legal action
3. Loss of eligibility for federal aid
4. Difficulty in obtaining credit”

One of the best things about your student loan lender is that they will help you out in hard times. If you cannot make a payment, alert them immediately. They can usually switch you to a plan that is more comfortable for your circumstances or place your loan in deferment if you meet certain circumstances.

2 Responses to “Student Loan Payback”

  1. yummy64 Says:

    Have you considered paying more each month to get your debt off your back?

    It might be worth it to accelerate it. 15 more years is a long time to live iwth Sally Mae.

  2. JRBeaudry Says:

    Right when I get a full time job, I will be paying another 50%. I also think after I flip my 3rd house I will pay it all off. So it’s really depending on my first job. I want all that debt gone in about 5 -6 years. *hopefully*

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