Graduation can be a crazy time – you’re moving, starting or searching for that great job – you may not be thinking about your student loans. But if you consolidated in school or have a Grad PLUS loan, you should know that your first bill is on the way. Are you ready to make a payment this June?
Unlike most loans, consolidation and Grad PLUS do not offer a grace period. That means you start repayment as soon as you graduate, and that’s tough for a lot of students. Considering all the life changes you go through post-graduation, it’s not uncommon for borrowers to miss payments early on — in fact, the most commonly missed payment is the very first one, according to The Wall Street Journal.
If your repayment benefits (those interest-rate reductions, commonly offered by most lenders) are based on timely payments, this one slip-up could cost you thousands of dollars in lost savings. Be pro-active: contact your lender today and make sure they know how to reach you by mail and phone.
And before you put on the cap and gown, make a plan for repayment. If you have one of these loans with no grace period and you know you can’t start paying them back right away, consider applying for a deferment or forbearance. But make sure that your request for deferment or forbearance doesn’t alter your ability to receive your repayment benefit (talk to your lender about it). If you are able to pay, mark your calendar, set up your direct deposit and leave a forwarding address in case you move. It’ll save you big in the long run.