6 Tips to Tackle Your Student Loan Repayment

loan repayment

Loan repayment is stressful. Nobody likes to see a considerable chunk of their bank account disappear. But, if you’ve just started paying off a student loan debt, you may be able to save some money if you plan smartly. But beware, missing your payments or failing to do so can be very harsh, especially if you’re just making the move from the carefree college life to the harsh reality of the professional world.

Here are some tips to help you through your loan repayment –

Loan repayment options

The very first thing you need to know, as mentioned in the prequel to this blog, is the options you have for repayment. If you have a federal student loan, you can go with the Standard Repayment Plan and pay off your loan in 10 years. You also have the option to apply for an Income-Driven Repayment Plan, Graduated Repayment or the Extended Loan Repayment depending on your requirement. On the other hand, if you have a private student loan, you have lesser options to choose from and you’d lose the federal protection and flexibility that you enjoy with the former.

How much can you save?

If you are already employed, then there are 3 words tailored for you – ‘Employer Benefit Plan’. This magical plan will enable your employer to assist you with your student loan repayment. If on the other hand, you aren’t employed, you’d have to rely on yourself for your repayments. The best practice is to pay as much as possible, as early as possible. This will reduce interest amount and eventually, reduce the total figure you have to pay.

Stay away from trouble

Ignoring your student loans can have serious consequences. Not paying a loan is considered a crime and as for federal loans, nine months of non-payment will classify you as a defaulter. This will ruin your credit score, increase the total amount you owe to the bank and the government can even garnish your wages and seize your tax
funds. Stay out of such troubles – borrow as little as you can and repay as early as possible.

Prepay if possible

If you can afford to pay more than your monthly amount, do it. This can reduce the interest you have to pay over the lifetime of the loan. Be sure to include a written request to your lender specifying the extra amount so it can be applied to the loan balance.


This is one word that’s taken for granted by every student. Having a well-designed budget can be very helpful when you start managing post-college expenses. Track your expenses and be sure to compare them to your current or expected income to get a good idea about how much and what luxuries you can really afford. Your college might help you repay your loan, acquainting you with the process of loan repayment and providing counseling on the best practices for loan exit.

Don’t panic

If you are struggling to repay because of unemployment, health problems etc., don’t panic, you still have options to manage your federal student loans. There are legitimate ways to temporarily postpone the loan repayment, such as Deferment and Forbearance. Although, this will only accrue the interest on the loan, thereby, increasing your total debt. Communicate with the lender about making interest-only payments if you can afford it.

Are you planning to repay a student loan? Was this article helpful to you? Share your views in the comments below.