Repayment (also repayment period)
Making payments on a loan. The "repayment period" is the period during which payments are required to be made.
Repayment Plan(s)
The Direct Consolidation Loan Program offers four repayment plans with various term selections:
* Standard Repayment Plan - Under this plan, you will pay a fixed amount of at least $50 each month for up to 10 to 30 years, based on your total education indebtedness. This plan may result in lower total interest paid when compared to repayment under one of the graduated plans.
If you have not selected a repayment plan by the time repayment begins, your loan(s) will be placed on the Standard Repayment Plan.
* Graduated Repayment Plan - Under this plan, you will pay a minimum payment amount at least equal to the amount of interest accrued monthly for up to 10 to 30 years, based on your total education indebtedness. Your payments start out low, and then increase every two years. Generally, the amount you will repay over the term of your loan will be higher under the Consolidation Graduated Repayment Plan than under the Consolidation Standard Repayment Plan. This plan may be beneficial if your income is low now but is likely to steadily increase.
* Extended Repayment Plan - To qualify for this plan, your Direct Loan balance must be greater than $30,000, and you will have up to 25 years to repay your loan(s). Plan options include:
Monthly Payment Option - You will pay a fixed amount of at least $50 each month for up to 25 years. Repayment under this plan will result in lower total interest paid when compared to graduated plans with similar terms.
Graduated Monthly Payment Option - You will pay a minimum payment amount of at least $50 or the amount of interest accrued monthly, whichever is greater, for up to 25 years. Your payments start out low and then increase every two years. Repayment under this plan may provide lower initial monthly payments, although the total interest paid may be greater when compared to plans with similar terms with fixed payments. This plan may be beneficial if your income is low now but is likely to steadily increase.
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