This option offers the lowest cost, with payments staying the same through the term of the loan. When a graduate begins repaying a loan, he is automatically placed on this option.
If a graduate has accumulated more than $30,000 in student loan debt, this option may be the best for repayment. This option lowers the monthly payment and doesn't require the graduate to apply for a new loan.
With this option, monthly payments are lower at the beginning of the repayment term and gradually increase over the life of the repayment period. Graduates can opt to make interest-only repayments for up to four years, with the payments after that period adjusting to a higher rate.
Under this option, monthly payments are based on a percentage of the graduate's income -- from 4 percent to 25 percent, as long as she pays the accrued interest monthly.
Student loan companies let their customers choose a repayment plan that best suits their current financial situations. As the customer's income increases, they have the option of increasing the monthly payments as well.