By Jim Donovan: Sallie Mae has announced that its introducing a transitional loan repayment plan so that graduates will have more budget flexibility while job hunting.
The Graduated Repayment Period will allow new college graduates in good standing to sign up for a one-year interest-only payment period, after the six-month grace period, instead of making full principal and interest payments at that time. The feature will be available for new Smart Option Student Loan applications on April 1 for undergraduate and graduate students who attend degree-granting institutions beginning in the fall semester.
The feature was designed to keep the total cost of the loan low. For example, a freshman borrower who elects in-school deferment on a $10,000 loan with typical loan terms would pay $144 per month for a 10-year repayment term. With the Graduated Repayment Option, the monthly payment would be $89 the first year, then $152 the second year, until it’s paid off. The difference in the total cost is less than $400, without extending the length of the loan.
For more information and to view a cost comparison chart visit: http://bit.ly/1718gDu