How bittersweet! You’ve worked hard and finally graduated from college – congrats! – but now you’ve got to face the real world and all its financial implications. The next year will be full of new trials and tribulations – landing a job, finding an affordable living situation, trying to attain the right work-life balance. No matter what your future holds, one thing is certain: your first student loan payment is coming.
Many federal student loans have a grace period after you graduate during which you are not required to repay your student loans. Typically, these grace periods are six months long and can give you time to settle financially. But once the grace period is over, your loan servicer will contact you to let you know how the repayment process works and to help you pick your repayment plan. The moment you realize you’re going to have to pay all that money back plus interest can be very sobering. But the most important thing for you to do is to keep calm and make that first student loan payment.
How to Make Your First Student Loan Payment
It may sound daunting now, but your servicer will do their best to make it easy for you to repay your loan. Make no doubt about it – they want your money, so they are more than willing to help you figure out how to make payments. You can use any of the methods below to make that first student loan payment. If you have any issues, contact your servicer – but be wary. While they may have the best intentions, servicers have a bad reputation of giving incorrect information. If you question what your servicer is telling you, feel free to hang up and call back. You’ll likely speak with a different representative, who can either confirm the information or give you a more accurate answer.
1. Pay your servicer manually
If you’d prefer to make your payments manually, that’s definitely an option. Most servicers offer a variety of ways to pay: you can pay on their website, over the phone, through their app (if they have one), or via mail. If you pay on their website or through their app, you can also choose to save your bank account information so you can easily use it when you make the next payment.
Making your manual payments electronically is quick and easy and will save you time and money. However, if you’d still like to mail in your payment or give your servicer a call every month to make your payment, there’s nothing stopping you!
2. Set up autopay with your servicer
The fastest and easiest way to ensure you make your monthly payment is to set up autopay with your servicer. Autopay will automatically withdraw your student loan payment from your checking or savings account on a date you select. It’s free and easy – you can even sign up for it if you’re not in repayment. Some servicers also offer benefits of signing up for autopay. Many offer an interest rate deduction if you sign up for autopay while you’re in repayment of a Direct loan.
Autopay is the best way to ensure you never miss a payment and fall into delinquency or default. You can also make your autopay larger than your monthly minimum to help pay off your loan faster.
There are a few drawbacks to autopay. It can put you at risk for overdraft or insufficient funds fees from your bank if you don’t have enough money in your account to cover the payment. This can also result in a late payment fee. If you ever want to cancel autopay, some servicers require a certain amount of time to process the cancellation. So in that situation, you’d want to check with your servicer about their cancellation policy to ensure you don’t get charged automatically.
3. Set up autopay with your bank
If you’re someone who already has set up other bills to pay through your bank, you may find it convenient to make your monthly student loan payments through your bank’s automatic payment systems. You’ll need to work with your bank and your servicer to make sure this automatic payment is set up correctly.
Be wary of overdraft fees and ensure you always have enough money in your account to cover the debit. Also, you’ll want to set the payment date to be earlier than your payment’s due date. This will give the online transfer time to be processed and reflected in your account. Some banks will allow you to set up recurring payments for as long as a year, but this can vary. Check with your bank to figure out when you may need to reset this automatic payment.
If you find you’re having trouble making your student loan payments, there are options available to you that can help you keep your loans in good standing. Our Student Loan Solver can help you find the best solution for your situation.
Disclaimer: The viewpoints and information expressed are that of the author(s) and do not necessarily reflect the opinions, viewpoints and official policies of any financial institution and/or government agency. All situations are unique and additional information can be obtained by contacting your loan servicer or a student loan professional.