Whether your student loans are in deferment due to the CARES Act of March 2020 or other circumstances, you’ll need to be prepared to begin making your payments once deferment ends. We’ve put together some steps to take so you’re prepared to enter repayment.
Before your payments kick in, you’ll want to know exactly how much you owe and to whom. Take inventory of your student loans, both federal and private, and put together a list consisting of total amounts you owe, monthly payments, and interest rates.
In addition to that information, you’ll need to become familiar with your repayment terms. Federal loans may have multiple repayment plan options, such as traditional, graduated, or income-based schedules. Private student loans can have fewer repayment options. Your repayment plan can impact your monthly payment amount and when your payments are due. As the borrower, you’re responsible for staying up to date on your loan terms.
While in deferment, you may have allocated your monthly student loan payments to other financial obligations. If so, you’ll need to make a plan to resume your payments while also meeting your current monthly commitments. Review your budget and see where you can adjust, if necessary. If you don’t have a budget, review your finances and put one together before your payments kick in.
When looking for areas to cut back, consider contacting your servicers and asking for different payment plans. This isn’t limited to your student loans. Look into your cell phone plan, car insurance, and even cable or streaming services to see if you can renegotiate the terms of your payments. Oftentimes, you can reduce your monthly obligations, which will allow you to apply the amount you saved toward your student loan repayment.
If you have additional debt and your payments are overwhelming, consider a Visa® Balance Transfer to consolidate your payments. You can use a balance transfer for more than credit card debt, but be sure to compare interest rates and review any terms you may be giving up before completing the consolidation.
If you’re unable to make your payments or are concerned that your monthly payments may be too high for your current budget, take action as soon as possible. Contacting your lender or servicer before your repayment period begins can help avoid a negative impact on your credit and any fees associated with missing a payment. Lenders are more likely to work with you if you’re proactive. With federal loans, you may be able to extend your deferment or apply for a forbearance, which will postpone your payments for an additional amount of time. When reviewing your options, be sure to check if your loans will continue to accrue interest or any other fees while you aren’t making payments.
Resuming your student loan payments may feel stressful, but you can approach your new payments with ease when you plan ahead. If you’re facing repayment and are still in need of financial resources, check out our WalletWorks page.