College is expensive, so if you’re like most undergraduates, you probably took out a student loan. In fact, nearly 70% of graduates have student debt and 44 million Americans have a total of $1.4 trillion in student loan debt!
When it’s time to pay back those loans, you need to do your homework so that you don’t have more debt than you anticipated. Here’s what you need to know about paying back student loans:
- Interest on a student loan starts as soon as you get the loan, so make sure you know what type of loan you have, as that will determine the interest rate.
- Most student loans have a grace period, which is the waiting time from when you graduate to when you need to start paying back your loans. Your grace period will depend on what type of loan you have.
- If you can prepay your loan, you should, as you’ll save money. If you decide to prepay your loan, you need to send a letter to your loan servicer, informing them that your payment is a prepayment. Otherwise, your prepayment might be credited against a future payment, rather than being applied toward your loan balance.
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