If you remember one thing about loan repayment, remember: always keep in touch with your lenders. Borrowers are required by law to inform lenders of any changes in their circumstances or status (name change, new address or telephone number, etc.) throughout the life of their loans. Failure to do so may lead to late payments, damage to your credit status, garnishment of wages, seizure of federal tax refunds, and possibly a declaration of default, which makes loans due and payable immediately. On the other hand, if you anticipate having difficulty in making payments and communicate with your lender ahead of time, lenders can work with you to explore all of the repayment options available to avoid default or delinquency. Remember that lenders, too, would prefer that you avoid default. Again, always keep in touch with your lenders!
To help you estimate the cost of your loans over different repayment periods, and to show the effects of a variety of repayment options and loan consolidation, many lenders and student financial aid organizations include loan repayment calculators among their online services. You may wish to consult the Smart Student Guide to Financial Aid Web site (www.finaid.org) or the website of your own lender/holder/servicer to get an idea of estimated monthly payments based on specified interest rates and repayment periods. While extending the loan repayment period is advisable for borrowers who may be having difficulty meeting their standard monthly loan payments and need to lower them, we would like to draw your attention to the significant rise in interest costs when the length of repayment is increased.
