When Do I Need To Start Repaying My Student Loan?

Most people don't realize that student loans don't need to be repaid until their grace period ends 6 months after completing school. That means that if you finish school in 4 years, you won't need to start making payments on the loans you've received as a freshman until 4 and a half years later.

In most cases interest will accrue during the time you're in school and will be added on to the repayment amount. However, if you qualify for a subsidized Stafford loan, your interest payments will be completely waived during the time you're in school.

After graduation, most borrowers choose to consolidate student loans. With a student loan consolidation, one low fixed interest loan is secured to pay off the slew of various loans accrued throughout your college years. Many students borrow at least one subsidized and one unsubsidized student loan every semester. Over four years, that adds up to 16 different loans that all need to be paid and all show as unpaid credit lines on your credit report.

Consolidating student loans not only replaces all of those open loans with a single loan, it can also significantly reduce monthly payments buy up to 63%. The 6 month grace period following graduation is the ideal time to consolidate student loans. During this grace period, interest rates are significantly lower than when the loan enters repayment status.

Student loans are some of the most flexible loans available and perfectly designed for students and young professionals. Because students just out of college often experience rocky financial times, student loans can be placed into forbearance until the pressure lifts.

Student loans are quite possibly the best investment a person can make in him or herself. Because of the way in which student loans are designed, you won't need to repay your loan until you're earning the higher paycheck afforded by your college education.