Your student loan grace period begins when you graduate. During that time, you don’t have to make any payments on your loans, and can instead focus all of your attention on adjusting to life after college, finding a place to live, and looking for a job. Though you’re not required to take action on your loans during this period, smart graduates use this time to their advantage. They make a proactive plan to tackle their student loans head on so they can achieve financial freedom more efficiently. With that said, here are the five things we recommend doing before your student loan grace period ends:

1. Consider making interest-only payments.

Even though you don’t have to pay anything towards your loans during the grace period, interest will continue to accrue. And once you begin making monthly payments, your lender will add that interest to your total outstanding balance. If you can afford it, interest-only payments will prevent that from happening, thus saving you money.

2. Get organized.

If you’re like most graduates, you had to take out several federal and private student loans from multiple lenders to finance your schooling. This can make paying for your loans pretty confusing. Your grace period is the ideal time to get organized and compile all of your student loan information in one easy-to-access location. To do this, we recommend creating a spreadsheet with your monthly payment amounts and interest rates.

3. Research your repayment options for federal loans.

Federal student loans offer a wide range of programs that can make repaying your debt manageable. The parameters will vary depending on the program and type of federal loans you have, but they all give you the opportunity to pay less when your income is lower. And, in many cases, the remaining balance will be forgiven after 20 to 25 years of making payments.

4. Call your lender for help with private student loans.

If you anticipate having trouble paying back your private student loans, reach out to your lender and let them know your situation. Depending on their policy, they may be able to adjust your loan in some way to make your monthly payments more manageable. 

5. Make a plan to refinance student loans.

When you refinance student loans, you’re paying off your debt with a brand new loan with fresh terms. As long as you have a full-time job and a good credit score, this move can lower your interest rate and your monthly payment – potentially saving you thousands of dollars over the life of your loan. We encourage you to refinance as soon as your grace period ends, to save the maximum amount of money over the long-term.

Please note that the information provided on this website is provided on a general basis and may not apply to your own specific individual needs, goals, financial position, experience, etc. LendKey does not guarantee that the information provided on any third-party website that LendKey offers a hyperlink to is up-to-date and accurate at the time you access it, and LendKey does not guarantee that information provided on such external websites (and this website) is best-suited for your particular circumstances. Therefore, you may want to consult with an expert (financial adviser, school financial aid office, etc.) before making financial decisions that may be discussed on this website.