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Repayment
Repayment will help you establish your credit history!
When you apply for other types of credit such as a car loan, credit card(s), home loan, etc., you will be required to demonstrate that you are "credit worthy." Here are a few suggestions to begin building a credit history:
- Establish a checking account and/or savings account and use them responsibly!
- Have a telephone installed and billed in your name.
- Pay student loans on time!
- Pay ALL credit obligations on time, as scheduled.
Your rights as a borrower.
You are entitled to a repayment period of at least five years unless your minimum monthly payment (set by regulations) results in a lesser payment plan. The maximum repayment term can be either 10 or 25 years, depending on the total loan balance and date of the first disbursement. Follow these guidelines:
- You have a right to repay the loan in whole or in part, at any time, without penalty.
- You are entitled to a copy of your repayment schedule and financial disclosure statement. This will be provided by your lender or loan repayment center.
- You have a right to be informed in writing if your lender sells your Stafford loan or otherwise transfers the right to receive payment. This is referred to as a "Secondary Market" or "Servicer".
- You have a right to defer payments for a specific period of time if you meet the eligibility requirements and submit the necessary documentation.
- You have a right to examine the federal and state regulations governing the student loan program. Your lender or loan repayment center will have a copy of this information. (If your lender is Student Loans of North Dakota (SLND), call 1-800-472-2166 ext. 5660.)
Repaying your student loan(s) hints and tips:
- Federal Stafford Loan: repayment begins six months after graduation or enrollment falls below half-time status.
- Federal Unsubsidized Stafford Loan: you are responsible for the interest payments while you are in school.
- Federal Parent Loan for Undergraduate Students (PLUS): repayment begins within 60 days of the final disbursement.
- The easiest payment method for both the borrower and the lender is an automatic payment withdrawal through the Automated Clearing House (ACH). This is an automatic withdrawal from your checking or savings account to pay your student loan payment. There is no charge and there are major advantages. You do not pay for checks, envelopes, or postage; payment is never late, ensuring you have no late charges; and, it could save you interest because payments are posted sooner. You just make the entry in your checkbook on the date of withdrawal. Your lender may offer other options such as payment coupons or billing statements. Contact your lender to find out what is available and select the one that suits your needs.
Keep your lender informed if:
- you are no longer in school.
- you have dropped to less than half-time status.
- you have any change of name, address, or phone number.
Last, but not least!
If you are having problems making payments on time, contact your lender immediately! Your lender may be able to grant a forbearance, or you may qualify for a deferment. Your lender is there to help, but you must inform them of any changes in your status!
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