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By : Raam Dhakad
KYD - Personal Finance
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Whenever you decide to make your income-based repayment, you will need to request a change from your loan servicer.
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First determine your options, contact your loan servicer and find out what options may be available.
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Your choice will depend on what type of federal loan you have and when you borrowed the money.
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You can decide which plan is right for you by asking your loan servicer to identify the most appropriate income-driven plan for your individual situation.
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Once you have decided what type of income-driven repayment plan you want, the next step is to submit an income-driven repayment plan request.
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This application can be submitted online or through hard copy. Paper copies of the application can be obtained from your loan servicer.
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When you submit your application, the most important information you have to provide includes your income information.
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If you have a loan with multiple servicers, you will have to repeat the process with each of them.
It usually takes a few weeks for your servant to make a decision regarding your income-driven repayment application. In the meantime, keep making your regular payments to avoid falling into default.
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It's also worth noting that you'll need to go through this process each year to remain eligible for income-driven repayment.
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Otherwise, your servicer will automatically put you on the standard repayment plan, which means your payments will go up.