Paying Student Loans with a Graduated Repayment Plan

There are many potential repayment plans for you to consider when you are paying your student loans. One of the most popular methods of repayment is to utilize the graduated repayment plan. Here are a few things to consider about paying student loans with a graduated repayment plan.

Graduated Repayment Plan

This is a type of repayment plan that will allow you to start out with a small monthly payment. Every two years, your student loan payment will be recalculated and increased. In this way, you will be able to increase the amount of money that you are paying as your income slowly increases.

Calculating Your Payment

With this type of plan, there are two ways that they could calculate your initial payment. It will either be equal to the interest rate that you are accruing or half of what you would pay with the standard repayment plan. This means that the minimum amount of money that you could start off paying is only $25 per month. As the payments increase, they can never exceed 150 percent of what you would be paying with the standard repayment plan. This offers you some protection in your monthly bills.

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