Student loans are a reality for a large number of college graduates in Canada today. And repayment of these loans is needs to be one of the top priorities after graduation. Here are a few tips to remember when it comes time to paying back your student loan.
Remember Your Grace Period
Typically, you’ll have a six-month grace period starting the first day of the month following your last day of full-time post-secondary studies where you are not required to make any payment on your student loans. If you choose to make payments at this time, you can. You will accrue interest on your loan during the grace period. At the end of the six months, you can either choose to pay off the interest or add the accumulated interest to your balance owing. Your monthly payments will be based on this new balance owing.
Within six-months of leaving full-time studies, you’ll receive a consolidation agreement from your lender in the mail. It’ll include details about your current balance, expected monthly payments and the length of your repayment period. It is important that you read the agreement, follow all instructions and return it to your lender. If you haven’t heard from Student Loans after your grace period, contact them.
Making Your Payments
If you’re ready to start repaying your student loans, make sure you know where to make your payments. Depending on where you live, you may be making payments on integrated student loans (as in BC, Saskatchewan, Ontario, New Brunswick, Newfoundland and Labrador) or provincial and federal student loans (as in Alberta, Manitoba, PEI and Nova Scotia).
Make sure you know when the repayment period on your student loan starts. Identify the steps you need to take to set up your payments and explore different options you have when it comes to making them. These could include one-time debit, pre-authorized payments and online of phone banking.
Know what you owe. Ensure you make your minimum monthly payment to keep your loan in good standing. If you want to pay off your loan faster, you can make lump sum payments at any time. You can also increase the amount of your monthly payment, applying the amount above the minimum monthly payment directly to your principal.
Learn About Repayment Assistance
There are a number of resources available to you if you need assistance with repaying your student loan. You can customize your repayment by changing your repayment date or reducing the amount of your minimum monthly payment through extended amortization.
Interest Relief may also be an option. If you have filled out and returned your consolidation agreements, you must submit the Student Loan Interest Relief application form for Federal and Provincial lenders before your payment is due. Loans in default will not qualify. Speak with your lender to learn how you can be considered for Interest Relief.
Repaying your student loans will help you avoid additional interest charges, loss of future student assistance, collections agencies, bad credit ratings and any lost Income Tax refunds. Learn more about repayment options today.
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