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7 steps to prepare for student loan repayments

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Get your budget ready and strategize to save.

For most students, you have six months after leaving school before you have to start repayments. But that doesn’t mean you should ignore your loans during that time. Planning ahead can help you stay on top of your repayments and save on interest.

Step 1: Set up an account with your servicer

Your student loan servicer — the company that handles repayments — should reach out to you shortly after you graduate, usually by email. Often they’ll provide an overview of what’s to come, including your first repayment date and instructions to set up your account. You’ll create a username and password, which you can use to log in and make repayments.

Haven’t heard from anyone yet? You can find out who your federal loan servicer is by logging in to your Federal Student Aid account — the account you used to fill out the FAFSA. If you have private student loans, contact your lender for information on repayments.

Step 2: Check your current loan balance

Chances are you now owe more than you borrowed. With the exception of federal Direct Subsidized Loans, interest starts adding up as soon as you take out the loan, not when repayments begin. The interest that accumulates during this time gets added to your loan balance when repayments start — known as interest capitalization.

Your current loan balance might not reflect capitalized interested while you’re in your grace period. Look at your statement to find out how much interest has added up. This will give you an idea of how much your new loan balance is and help you pick a repayment plan.

Step 3: Go over your income and expenses

Figuring out how much free money you have each month can help you choose a repayment plan you can afford. There are two ways to do this: by hand or using a budgeting app like Mint.

To do it manually, add up monthly expenses such as your rent, Internet, groceries and other recurring costs. Then subtract this from your monthly income after taxes.

If you’d rather let technology do the work for you, budgeting apps typically connect to your bank account and credit cards and analyze your spending patterns to make a realistic budget.

Step 4: Pick a repayment plan for federal loans

Based on your budget, choose a repayment plan that’s right for you. If you’re not certain what your budget is going to look like, you might want to pick a repayment plan based on your income or a graduated plan, which starts low and increases over time. If you’re thinking of applying for Public Service Loan Forgiveness (PSLF), you need to be on an income-driven repayment plan to qualify.

Otherwise, try to pick the plan that comes with the highest monthly repayments you can comfortably afford. The faster you pay off your loan, the more you’ll save on interest — and the quicker you’ll be out of debt.

What about my repayment plan for private student loans?

With private student loans, you typically only have one repayment plan after your grace period is up: full interest and principal repayments based on the loan term you chose when you first took out your student loans. Unlike federal loans, you don’t have the flexibility to choose a special repayment plan based on your income.

Step 5: Sign up for autopay

Now that you have your payment plan set up, follow your servicer’s directions to sign up for automatic repayments — often called autopay. You can get a 0.25% interest rate discount on federal loans and most private student loans. Some private lenders might even offer discounts as high as 0.5%.

Be sure to keep tabs on your bank account and loan balance with autopay — sometimes even machines can make mistakes. If your payment doesn’t go through, you could be charged a late fee and a nonsufficient funds fee.

Step 6: Consider consolidating federal loans

Taking out a federal Direct Consolidation Loan can help you manage your repayments by combining all of your federal loans into one. You might want to consider it in the following circumstances:

  • Your loans can’t qualify for income-driven repayments
  • You want to switch servicers
  • You want a longer repayment term

You can consolidate your loans through your federal loan servicer by logging in to your account and filling out an application. You can find out what to expect from the process by reading our guide to federal loan consolidation.

Can I refinance my student loans now?

Sometimes, though it depends on your lender and the refinancing company. Some require you to make a year or two of on-time repayments before you can qualify for refinancing. You also might want to hold off until you’ve built up your credit score or started a new job — a higher income and credit rating can get you a more competitive deal.

You might want to consider refinancing private student loans now if you’re unhappy with your servicer — a new loan means a new company will likely handle your repayments. Consider applying with a cosigner to make sure you can qualify.

Step 7: Download your servicer’s app

Most servicers have an app that makes it much easier to manage repayments and other aspects of your student loans. They also often send push notifications to remind you when your payments are due and when they’ve been processed. It can help you stay on top of your loans and be notified if anything goes wrong.

When should I start thinking about repayments?

You should start planning for repayments as soon as possible during your grace period. But you don’t have to sign up right away. You might want to wait until you have a job lined up and are relatively settled into your post-graduation life before deciding on a repayment plan.

Compare refinancing offers to switch up your servicer

Data indicated here is updated regularly
Name Product Min. Credit Score Max. Loan Amount APR
Discover Private Consolidation Loan
Good to excellent credit
$150,000
2.80% to 12.49%
Splash Financial Student Loan Refinancing
660
None
Starting at 1.89%
Save on your student loans with this market-leading newcomer.
Credible Student Loan Refinancing
Good to excellent credit
None
1.99% to 9.24%
Get prequalified offers from top student loan refinancing providers in one place.
Education Loan Finance Student Loan Refinancing
680
None
2.39% to 6.01%
Lower your student debt costs with manageable payments, affordable rates and flexible terms.
Earnest Student Loan Refinancing
650
$500,000
1.99% to 5.64%
Get a tailored interest rate and repayment plan with no hidden fees.
SoFi Student Loan Refinancing Variable Rate (with Autopay)
650
Full balance of your qualified education loans
2.25% to 6.09%
A leader in student loan refinancing, SoFi can help you refinance your loans and pay them off sooner.
Purefy Student Loan Refinancing (Variable Rate)
620
$300,000
2.27% to 7.49%
Refinance all types of student loans — including federal and parent PLUS loans.
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Compare up to 4 providers

Bottom line

You can technically ignore your student loans until just before six months after you leave school. But planning ahead can help you make sure you end up with repayments that fit your budget. Learn more about what to expect by reading our guide to student loans.

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