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You can select the type of loan; you may also choose
your repayment terms.
When Loan Repayment Begins
Loan repayment usually starts after you graduate. If you drop out of school—or if you suspend your studies beyond the grace period—you will be required to start repaying your student loan.
Once you begin borrowing, interest starts to accrue
on your loan. Except for subsidized loans, the accrued
interest is added to your loan balance once you start
repaying the loan. This increases the total balance
you must repay. To reduce your costs, try to
start repaying your loan before you graduate, or at
least make payments on the interest. Most lenders
allow interest-only payments on a monthly, quarterly,
or annual basis while borrowers are still in school.
Repayment Options to Consider
Most student loan lenders and servicers offer different
repayment options. Check with your lender or servicer
for details on repayment plans. Repayment plans usually
reflect one of the following options:
Standard Repayment
Principal and interest payments are due each month throughout the loan repayment term.
Graduated Repayment
Payments are lower at the beginning of repayment and step up at specified periods and in specified amounts over the term of the loan.
Income-Sensitive
Repayment
Monthly payments are based on a percentage of the borrower's monthly income for Stafford and PLUS.
Extended Repayment
Lower monthly payments through an extended repayment
period, up to 25 years.
Serialization
Sallie Mae purchases a borrower's loans held by other Federal Family Education Loan Program (FFELP) lenders or institutions and services them in one account with the borrower's other Sallie Mae-owned loans. Borrowers make one monthly payment and retain the original terms and interest rates on their loans.
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