How to Make Your First Student Loan Payment – Forbes Advisor

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Many students depend on student loans to pay for their education. But for the most part, they won’t make their first payment on this debt until after graduation. If you’re having trouble remembering the details of that first-year loan, learn the steps to take before you make your first student loan repayment.

When is your first student loan payment due?

The majority of student loan repayments are not due until you have left school, allowing you to focus on your studies rather than paying off your loan. This is different from traditional loans like mortgages, auto loans, or personal loans, all of which require the first payment within a few weeks of disbursement.

If you are a student with federal loans, your first payment will be due six months after you leave school, which is the standard grace period. However, if you are a parent PLUS borrower, your debt will be repaid as soon as the money is paid, although you can choose to defer payments if you wish.

If you have private student loans, your grace period is determined by your lender. Many allow borrowers to select their preferred repayment schedule. For example, borrowers can often choose between starting payments immediately after receiving the money, making small interest payments only while in school, or postponing payments completely for up to six or even nine months after graduation. .

5 steps to making your first student loan payment

If you’ve recently graduated or aren’t enrolled part-time, your first student loan payment is probably approaching. Follow these steps to make sure you get started on the right foot.

1. Find your loan manager

You may have already received letters or emails from your student loan officer reminding you of your first payment. But if you haven’t received a letter, or if you don’t know who your loan manager is, now is the time to find out.

For federal student loan borrowers, log on to Federal student aid website to view details of your assistance, including federal student loans. It should list all the information about your loan, such as your balance, interest rate, provider, and first due date.

If you have private student loans, you can get a free credit report from Your report will describe your credit and loan accounts, and you can find the lenders involved. Create an account on the lender’s website or contact them directly to find out when your first payment is due. If you have multiple loans from more than one lender, you will need to contact each one individually.

2. Look at your interest rate and the length of your loan

If you have several different student loans, you may have different interest rates for each one. The interest rate on federal student loans changes every year, so the loan you took out as a freshman and the loan you took out as a senior will likely have different rates.

Also write down the terms of your loan, which indicate how long it will take you to pay off your debt. Most federal loans start with a 10-year repayment plan, while private loans usually allow you to choose your term when you take out the loan. Longer loan terms usually result in lower monthly payments, but you’ll pay more interest charges than with a shorter repayment period.

3. Compare the available payment plans

If you have private student loans, you probably chose your repayment plan when the money was first disbursed. Review the rules of your plan and write down the payment amount and the due date. If you think you’ll have a hard time paying your payments, contact your lender and see if they have any alternatives that can help you.

If you have federal student loans, however, you can select your plan when you start repaying (and change it at a later date if you want). If you do nothing, you’ll automatically be enrolled in the Standard Repayment Plan, which offers fixed monthly payments over 10 years.

However, alternatives are available if your monthly payments are too high for a standard repayment. For example, you might be eligible for an Income-Based Repayment Plan (IDR). These plans base your payments on your income and the size of your household. Plus, the rest of your debt will be canceled after 20 or 25 years, depending on which IDR plan you choose.

You can also explore other federal reimbursement options, including:

  • Progressive repayment plan. Payments start lower and increase gradually, usually every two years. You will pay off most loans in 10 years.
  • Extended repayment plan. You will have fixed or progressive payments and your loans will be repaid over 25 years. Borrowers must owe more than $ 30,000 to qualify.

Not all borrowers are eligible for all federal repayment plans, so read the guidelines carefully before choosing. If you plan to use discount options such as Public Service Loan Discount (PSLF), you must meet additional repayment requirements. It pays to read the fine print before making your first payment.

4. Consider automatic payment

After considering your refund options, consider signing up for automatic payment. This service automatically deducts your monthly payment from your bank account, ensuring you won’t miss any payments. In addition, many lenders offer an interest rate discount (typically 0.25%) for borrowers enrolled in automatic payment.

However, automatic payment can cause problems if you have inconsistent income or if you live paycheck to paycheck. You run the risk of overdrafting your bank account if you don’t have enough to cover your loan payment, which would likely incur additional charges from your bank and loan manager.

If you don’t want to set up automatic payment now, create a calendar reminder to remind you to make your loan payments manually each month.

5. Make your first payment

Now that you’ve gathered all the details, it’s time to make your first payment. Register on your loan officer’s website and have login details handy, whether it’s on a notepad near your desk or in a password manager.

Each loan manager has their own way of handling payments. Bookmark the payment site so you can easily navigate there when you need to make a payment. If you’re setting up automatic payment, keep an eye on your inbox. You should get information that your payment should be deducted from your account on a set day or you will receive a notification when the payment is made.

Plan for the long term

Paying off student loans is a marathon, not a sprint. And like any long-term commitment, you can run into issues or hiccups along the way.

If you are having difficulty making your payments, contact your loan officer immediately. Explain your situation and find out about alternative payment plans. Most lenders offer deferral or forbearance options, which temporarily suspend your student loan payments without penalty. If you’re on a federal income-oriented plan and lose your job or face a pay cut, you can even reduce your payments to $ 0.

If you have money to spare, you may want to consider making additional payments on your student loans. This can help you pay off your debt sooner and potentially save you thousands of dollars in interest.

Even if you have set your loans to automatic payment, be sure to check back every now and then to see the progress you are making. You can periodically reassess your repayment strategy and make sure it still makes sense for your current financial situation.

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