How to pay off student loan

kelsmom
Tue, 14 Jul 2020 01:20:50 +0000

Assuming she has not used her grace period, she has 6 months before her loans go into repayment. Subsidized loans should be paid off before the end of the 6 months to keep any interest from kicking in. Unsubsidized loans should be paid as soon as possible, because interest has been accruing since the loan funds were disbursed. At the very least, pay off the unsubsidized loans before the end of the grace period … the interest will capitalize the second the grace period expires.

If you really feel it’s important to build her credit with loan repayments, just keep a little unpaid. Before the grace period ends, you can decide which loans to repay (you don’t have that luxury once they go into repayment). Pay off all but a bit of the most recent, lowest interest rate loan if no subsidized loans … if she has any subsidized loans, pay off all but a bit of the subsidized loan with the lowest interest rate (regardless of when it was borrowed). But I think just paying it all off at once is the best way. You are doing a great thing for her!!