College Loan?
Friday, April 17th, 2009 at
12:00 am
Nikki H asked:
I am applying for a college loan and is asks how I want to make the repayment….1) Full Deferral 2) Immediate Repayment 3) Interest Only…..what is the best option for a student that doesnt make that much money to repay it ?
I am applying for a college loan and is asks how I want to make the repayment….1) Full Deferral 2) Immediate Repayment 3) Interest Only…..what is the best option for a student that doesnt make that much money to repay it ?
Tagged with: College Loan • Full Deferral • Much Money
Filed under: Student Loans
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Do not choose immediate. That means as soon as you are out of school you start paying the loan back. If you don’t make any money then choose Full Defferal. The interest only option means you pay off the interest while you are in school.
Full deferral or interest only. That way you’ll have lower bills now while in school. Make sure you lock in a low interest rate – nothing variable!
If you aren’t making that much money now, I would choose deferment. But here’s the caveat- the interest rate should be considered when you make your decision. Figure out how much it adds to your original principal. If it’s a lot then consider paying the interest only.
If you don’t earn much income, considered Federal loans, they’ll pay your interest until you graduate from school. (the best of both worlds)
As far as the option of immediate repayment, I don’t see many people doing this since college loans are like mortgages, they are for the long term. However, if you have the resources, or really nice relatives, immediate repayment would be the best bet since the overall cost in interest you pay is the smallest out of the three options.