Repaying Personal Loans

Personal loans are a popular choice for part-time students hoping to supplement their household income while they complete an educational program. If you've used personal loans to pay for your bachelor's degree program, you should be prepared to efficiently repay your personal loans after graduation. 

The Benefit of Loan Counseling
In the excitement of finishing your bachelor's degree program, be sure your loan repayment details don't get lost. In the last months of school, you should meet with your lender to take advantage of the free loan counseling they're required to offer. During this free counseling session, your loan advisor can help you understand your loan repayment options. Explore the possibility of repaying your loan early without a penalty to more efficiently repay the loan. Discounted repayment options may also be available; for example, some lenders offer incentives for payments consistently paid on time or for making online payments.

Your Personal Loan Repayment Plan
There are several repayment options for personal educational loans. You should contact your lender for specific information. Payment options generally include paying both principle and interest, paying interest only, or deferring principle and interest while you are in school at least half time. Your lender may also allow you to make income-sensitive or graduated payments. If you've borrowed over $30,000, you may be eligible for an extended repayment plans, which can stretch your repayment plan to a longer timeframe.

Your Credit and Personal Loans
Don't let temporary financial trouble permanently affect your credit. If your loan goes into default because of late or missed payments, your credit and purchasing power could be affected for up to seven years. If you have a co-signer on your loan, defaulting on that loan can also affect the credit rating of your co-signers, and those co-signers may also be pursued for repayment. If you're concerned that you may not be able to make timely loan payments, talk to your lender immediately about forbearance or deferment options.

Prioritize Your Loan Payments
If you took out multiple student loans, you might find that a fluctuating market increases the variable interest rate on your personal loans. Contact your lender to see if accelerating payments on high interest loans is an option. Consolidating your loans might also be a smart financial step. Explore all of your repayment options to protect your credit and financial future.