Loan Tips for Recent Graduates

Your college career has ended, and you probably had some great times. However, now that you are done with school, it is time to think about next steps—one of them being your repayment plan for your school loan. Although your loan principal may be high, some tips can help you out.

Loans Are Typically in Deferment Until Six Months After Graduation

Many students worry that their loans will go into repayment immediately after graduation; however, that is not the case. For almost all of your school loans, private and government funded, there will probably be a time of deferment. This deferment period is a time after graduation where your loans are not yet in repayment, which means you don’t have to rush to find a job due to repaying your loans. Typically speaking, loans will stay in deferment status for six months after graduation, and after that, the status will go into repayment.

Doing More School? Your Loans May Stay in Deferment

If you are going to graduate school or some other form of secondary education, your loans may stay in deferment and never go into repayment until after you finish your master’s degree. This may be true as long as you are enrolled in a program within six months of your graduation date from your undergraduate degree.

Some Loans Take Accrued Interest and Add it to the Principal Once the Loan Goes into Repayment

Depending on the loan, the accrued interest attached to it may be added to the principal once the loan goes from a “deferred” to “repayment” status. Therefore, the interest from your loan from your freshmen year of college may move from the “accrued interest status” to add to the “principal.” This means the accrued interest will become part of the loan that grows interest, causing your loan total to increase. Therefore, it may be wise to pay off interest amounts of certain loans so that it doesn’t compound with the principal.

If you need other loan tips, or have questions about your financial future, contact American Investment Planners now!