With federal loans, you don’t have to start repaying them until you’ve graduated, dropped below half-time enrollment, or the loan is fully disbursed. Private student loan repayment terms, however, will differ by the lender, and there are not as many repayment options as with federal loans.
These are the most common repayment processes you will likely find:
- Immediate repayment: You will start making principal and interest payments while still in school. This could help keep down your overall out-of-pocket costs, but it might present additional financial pressure while you’re in school.
- Interest-only repayment: You will only pay the interest while in school, which could reduce the total cost of the loan you’ll have to repay. Even if the monthly interest costs are minimal, you’ll have to budget this into your monthly expenses and might need to take on a part-time job to cover the payments.
- Deferred repayment: You will only start paying back the loan once you’ve graduated or dropped below half-time enrollment. Interest could still accrue during this time, making your overall debt higher.
- Refinancing your private student loans: You might be able to get a lower interest rate if you have a solid income and good credit. Depending on your specific situation, this can help you spend less money over the life of your loan. Keep in mind that lower monthly payments might mean an extended loan term. A longer-term could cost you more overall, so weigh out the pros and cons of refinancing private student loans.
In general, repayment terms for private loans for graduate students can range anywhere from five years to over 20 years, but remember that the interest will add up over time.
Unfortunately, you won’t be able to choose options like income-driven repayment plans, forbearance, or loan forgiveness offered by the government. But many private lenders will want to work with you to come up with flexible repayment options that work for your situation.