How to Settle Student Loans

Due to the ever rising cost of higher education more students are required to take out some form of student loan. There are many locations you may obtain a student loan from, ranging from the government to a local bank and the seemingly always there Sallie Mae. Regardless of where you received the loan it is important to settle the loans after you graduate from school.

Instructions

    • 1

      Begin paying off the loans as soon as you start receiving payment documentation from the student loan provider.

    • 2

      Contact the loan provider if you are unable to pay off the current loan if, for instance, the monthly payments are too high. The company either gives you an extra six months to not pay on the loans (although the loans continue to build interest, increasing the amount you owe) or the monthly payment is lowered, extending the amount of time required to pay the loan back.

    • 3

      Pay the loan amount every month. If you are late you may be hit with a late fee, ranging from a higher monthly payment the following month or an increase in the interest rate you owe.

    • 4

      Contact the loan provider if you want to begin paying off more than the monthly loan payment. Most loan providers (such as the federal government and banks) allow you to pay off as much as you want and the extra each month goes towards the outstanding balance. Larger firms such as Sallie Mae, however, accept only the exact amount and put anything extra towards your next month's payment, essentially holding onto your extra money and earning interest off of it themselves while your loan continues to increase due to its own interest. In order to increase the amount you want paid on these loans you must request to increase the loan amount. This goes into effect the following monthly period.

    • 5

      Continue paying off each monthly payment until the entire loan has been paid off.

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