What you need to apply for a personal loan

To apply for a personal loan, here are the documents you’ll typically need to provide:

Identification – passport, driver’s license, state ID or Social Security card
Verification of address – utility bills, recent mail or copy of lease
Proof of past income – W-2 forms, pay stubs, bank statements or tax returns
You may also be asked for this information:

Social Security number
Monthly debt obligations (rent, student loans, etc.)
Gross income
Employer’s name, work address and phone number
Address, email, phone number
Previous addresses
Date of birth
Mother’s maiden name
College name and major
After providing this information, you’ll need to specify the amount of money you want to borrow and some lenders may ask you to choose how much time you need to repay it (typically two to five years). Keep in mind that the longer you pay back your loan, the more you’ll have to shell out for interest payments. If you borrow only what you need, you can keep your costs low.

How to find the lowest rates on personal loans
Here’s what you should do before agreeing to a deal:

See if you qualify for a 0% credit card. If you have good credit, you can probably get a credit card that has 0% interest on purchases for a year or longer, and that may be less expensive than taking out a personal loan.

Consider a secured loan instead. If you have a house, consider using it as collateral in order to get lower rates. A home equity loan or home equity line of credit can often be cheaper than an unsecured personal loan. Keep in mind that using your home as collateral means that if you default, you could lose your home.

Pay off as much of your credit card balance as you can before you apply. The outstanding balance on your credit card — even if you pay it off at the end of the month and never pay interest — counts against you when a lender runs a credit check.

Shop around. Your local bank or credit union may have great rates, especially if you have a long relationship. But online lenders are offering very competitive rates, especially for borrowers without top-notch credit. (See “Where to Get a Personal Loan.”)

What to watch out for with personal loans
If you ignore the fine print in your personal loan agreement, you could find out the hard way that you agreed to less-than-desirable terms. Look for these gotchas before signing your contract:

Prepayment penalties. Most online lenders do not charge a fee for paying off the loan before a certain date, called prepayment penalties or exit fees. But just to be sure, always look for the words “no prepayment penalty” on your loan terms when you apply.

Accidental overdrafts. Many online lenders ask for automatic withdrawals from your checking account, or offer a lower APR for choosing this option instead of paying by check. If you link your loan to your checking account for automatic payments, you might be in danger of overdrawing your account and paying an overdraft fee — usually, about $35. To avoid accidentally draining your bank account, consider setting up a low balance alert with your bank.

Scam artists. Before you sign up for any loan, particularly online,

The 5 fastest ways to repay your college loans

10If there’s one obstacle that prevents most millennials from investing either independently or with a financial adviser, it’s the burden of college loans. These loans weigh down graduates, preventing them from seizing new financial opportunities until they clear their debt. The average student debt for 2016 graduates is a record $37,173, up 6.05% from last year’s level, according to Mark Kantrowitz, publisher and vice president of strategy for Cappex.com, a college scholarship website.

So how can you get out from under that debt quickly? We spoke to investment managers and financial planners for their top tips to become free of that student loan. While they may be faster, some will definitely not be cheaper — at least initially. But all are worthwhile in the end.

SEARCH: Find a financial adviser who will help you pay down debt and reach your goals.

If you can afford it, treat the loan like a mortgage and simply make larger payments to cut the principal more quickly, says financial planner Allan Katz, CFP professional, president of Comprehensive Wealth Management Group in New York’s Staten Island.

For example, a $25,000 student loan with 6.8 % interest with a 10-year payback period would cost $288 a month. Paying $700 a month instead of $288 enables the borrower to repay the loan in just over 3 years, Katz says.

By doing this, borrowers are “paying the principal down more quickly, which results in lower interest charges,” he says. By paying extra, the entire loan would cost $28,000 rather than $34,560.

Another strategy is adding payments and sending in checks every 2 weeks rather than monthly.

Once that college loan is repaid, the benefits proliferate. “It’s one less debt you owe. The money you make is now free to be invested and applied to owning a house, saving for retirement or putting a child through college,” Katz says.

How to Get an Unsecured Personal Loan

5If you want to finance an adoption, consolidate your credit card debt or move cross-country, a personal loan can help you cover your immediate expenses without breaking the bank.

You can get these loans, typically unsecured, in amounts ranging from $1,000 to more than $50,000. And with a good credit score, you’ll likely be able to snag the most affordable interest rates, too.

Your options shrink and your payments rise if you have no credit history or bad credit, but you’ll find some lenders are willing to consider more than your credit score.

Here are some things to consider while searching for a personal loan:

With unsecured personal loans, credit is key
The interest rates on personal loans are typically higher than rates on secured loans, or loans backed by property. Because these rates depend on your creditworthiness, having a good credit score can also make it easier to find a low APR.

Credit unions, which are not-for-profit, tend to offer the most affordable rates for personal loans. They may also be willing to help you out if you have less-than-perfect credit. They are your best shot if you are looking for a small loan — say, of $2,500 or less.

Peer-to-peer lenders such as Lending Club and Prosper, which offer investor-funded loans to consumers with good credit, sometimes offer even lower rates than some credit unions to borrowers with excellent credit. If that’s you, compare rates you find online with those from your bank or credit union.

Borrowers with average credit will find plenty of options, along with higher rates. Some lenders will consider additional factors such as your job history or earnings potential in making their underwriting decisions.

With poor credit, you may have an easier time finding a personal loan if you have a cosigner or own property you can use as collateral. If you do find a cosigner, keep in mind that he or she will be on the hook for your missed payments. Do your best to honor your agreement and protect both your credit scores. Rates on these loans from alternative lenders will be considerably higher, as much as 36% APR if your credit is at the bottom of their underwriting guidelines.

Yet that’s downright cheap compared with payday lenders or the most unscrupulous tier of online loan companies, since they usually offer loans with upward of 300% APR and may try to charge you unnecessary fees.

Make a Budget


A budget isn’t just an important part of loan repayment — it’s an important part of overall financial independence. Your budget helps you allocate the funds for paying back your student loans (and, well, everything else you need to pay for in life). Check out our guide to creating your first budget.

Create an Emergency Fund

While creating an emergency fund should be part of your budget, it’s important enough that it deserves its own mention. This is a special section of your savings set aside for, well, emergencies. The idea is that if something terrible and unexpected happens – your car breaks down, you need to go to the doctor, etc. – you’ll have the funds set aside to pay for it without needing to pull from other areas of your budget. Shoot for having $1,000 in your emergency fund; that amount will cover most things that could happen.

Make Payments While Still in School

Paying your loans down before you graduate will certainly help you pay them off faster. For most loans (except for need-based federal subsidized loans), the interest meter is running the whole time you’re in school. When your required payments begin, the unpaid interest is “capitalized” – that is, added to your loan balance; interest then is calculated on the new larger, balance. Any payments you can make while in school help lessen interest capitalization and can save you money. Check with your loan servicer to be sure, but in most cases there are no prepayment penalties.
Consolidate Your Loans

Loan consolidation is not the right choice for everyone. But for some people, it can help. Consolidating your loans — grouping multiple smaller loans into one big one – could make paying your loans more convenient, because you only have one servicer.

Consolidation makes it harder to use the “debt snowball” technique with your loans — a method of debt repayment that has you pay off your smallest debt first, then “snowballing” the money you were putting towards that debt to the next biggest debt, and so on. This method works for all types of debt, not just student loan debt — check out our guide to the debt snowball method.

Consolidation can also extend your payback period. While this might help by giving you lower payments in the short-term, also note that you’ll be paying more interest in the long-term. You might also run into another problem if you’re interested in consolidating your private loans – since the credit crunch, fewer companies are offering private loan consolidation.

Finally, be wary of consolidating federal and private loans together. There are certain benefits that come with your federal loans — such as being eligible for income-based repayment (see above) — that you may lose if you consolidate private and federal loans.

Consider Enrolling in Auto-Debit

When you enroll in auto-debit, your student loan servicer automatically deducts your payment from your bank account each month. There are several benefits to this payment method, and some lenders may give you a discount just for enrolling.

You’ll Never Miss a Payment

If you have auto-debit, your loan servicer will automatically deduct the amount from your bank account. You do need to make sure, of course, that you have enough money in your account each month for the payment to clear — otherwise, you could be looking at overdraft fees.

While not exactly the same, this is also in the spirit of “paying yourself first” — a savings or debt-reduction technique where money is set aside before you ever receive it. For example, if you designate 10% of your paycheck to be direct deposited into your savings account instead of your checking, that’s paying yourself first.

Have a Positive Mental Attitude


Achieving any goal requires determination and a feeling that you can do this — and, really, you can. Psyching yourself up about it sounds silly, but it can really help. Remind yourself what you’re paying for — a college education. That’s huge! It helps open career doors, and it helps you grow as a person. And don’t forget — college graduates have greater job opportunities and still earn more money on average.

Many people who have paid off their loans also mention the great psychological benefit of feeling like a huge weight has been lifted off their shoulders. I know that personally, if I fantasize about getting a windfall of cash, the first thing I think about doing is paying off my student loans. (I know; boring fantasy. But right after paying off the loans, I’d travel!)

Understand Your Loans, and Make a Plan

In order to create an accurate repayment schedule, you need to understand your loans.

Use a Repayment Calculator

Plug the information about your loan into a repayment calculator like the one from FinAid.org, or use your loan servicer’s online account tools. Learn how much you need to pay per month in order to pay off your loan within a specific amount of time.

Pay Attention During Exit Counseling

If you borrowed a federal student loan, you are required to receive exit counseling, which teaches you important information about your rights and how to repay your loan. Depending on your school, you might do this online or in-person. Either way, make sure to pay close attention. You can see a “tour” version of federal student loan exit counseling that is full of helpful information.

Pay Attention to Details and Paperwork

Make sure you read everything you receive about your loans and understand your loan terms. For example, are your interest rates fixed (meaning that they will stay the same for the duration of the loan) or variable (meaning that they can change, possibly making it harder for you to budget your monthly payments)? Understanding the terms of your loans will help you avoid potential complications.

See If You Qualify for Income-Based Repayment

If you have a federal loan (other than a Perkins or Parent PLUS loan), and you are on limited income, the Income-Based Repayment (IBR) plan allows you to pay based on what you earn, not on what your loan payments are supposed to be. According to the Federal Student Aid office, “Under IBR, your monthly payment amount will be 15 percent of your discretionary income, will never be more than the amount you would be required to pay under the Standard Repayment Plan, and may be less than under other repayment plans.” And, if “you repay under IBR for 25 years and meet certain other requirements, any remaining balance will be canceled.”

This program is only for people who hold federal — not private — loans. Even if your loan is serviced by a private company, it might still be a federal loan. If you’re not sure, login to the National Student Loan Data System to see if you currently have a federal loan.

IBR does have some downsides — like possibly paying more interest since you’re stretching out your loan term. To learn more about whether the program is for you and how to apply, visit the Federal Student Aid office’s Income-Based Plan page.

8 Student Loan Tips for Recent College Grads

4Nothing says, “Welcome to adulthood” quite like getting your first student loan bill in the mail. If student loans are your reality, here are some tips that may help you (from someone who is going through this too).

1. Don’t ignore your student loans!
Affordable payment options

I think everyone can agree that student loans are no fun to pay back, but ignoring them can have serious consequences (and it won’t make them go away.) If you’re worried about your student loans or don’t think you can afford your payments, contact us for help. No matter what your financial situation is, we can help you find an affordable repayment option. For many, that could mean payments as low as $0 per month.

2. Set a budget.
Budgeting tips

Life after graduation gets real, real fast. To make a plan to tackle your student loans, you need to understand what money you have coming in, and what expenses you have going out. If you haven’t already, it’s important that you create a budget. This will help determine your repayment strategy. Here are some budgeting tips to help you get started.

3. Choose an affordable payment amount.
Repayment calculator | Apply for an income-driven repayment plan

There is no one-size-fits-all approach to paying back student loans. The key question you need to answer is: Do you want to get rid of your loans quickly or do you want to pay the lowest amount possible per month?

With our Standard Repayment Plan, the plan you’ll enter if you don’t take any action, you’ll have your loans paid off in 10 years. If you can’t afford that amount or if you need or want lower payments because you haven’t found a job, aren’t making much money, or want to free up room in your budget for other expenses and goals, you should apply for an income-driven repayment plan. Your monthly payments will likely be lower than they would on the standard plan—in fact they could be as low as $0 per month—but you’ll likely be paying more and for a longer period of time. If you choose an income-driven plan, you must provide documentation of your income to your loan servicer each year (even if your income hasn’t changed) so that your payment can be recalculated. To compare the different repayment options based on your loan debt, family size, and income, use our repayment calculator.

repayment estimator output

4. Research forgiveness options.
Loan forgiveness options

There are legitimate ways to have your loans forgiven, but there are often very specific requirements you must meet in order to qualify. Research forgiveness programs ASAP, as it may affect your repayment strategy. For example, if you’re interested in Public Service Loan Forgiveness, you’ll want to make sure you have the right type of loans from the get-go (which may mean you have to consolidate), and you’ll want to make sure to get on an income-driven repayment plan.

5. Sign up for automatic payments.
Sign up for automatic debit

If you don’t like thinking about your student loans, this is a great solution! Ok, ok, so you’ll still have to think about your loans and make sure you have the money in your account to cover your monthly payments, but you won’t have to worry about missing payments, writing checks, or logging into websites every month to pay your loans manually. Sign up for automatic debit through your loan servicer and your payments will be automatically taken from your bank account each month. As an added bonus, you get a 0.25% interest rate deduction when you enroll!

6. Make extra payments whenever you can (and specify how you want those payments applied).
How to make extra payments

Pay early. Pay often. Pay extra. If you want to ensure that your loan is paid off faster, tell your servicer two things. First, tell them that the extra you pay is not intended to be put toward future payments. Second, tell them to apply the additional payments to your loan with the highest interest rate. By doing this, you can reduce the amount of interest you pay and reduce the total cost of your loan over time.

7. Don’t postpone payments unless you really need to.
Affordable payment options

One of the flexible repayment options we offer is the ability to temporarily stop (postpone) your student loan payments. This is called a deferment or forbearance. While they can be helpful solutions if you’re experiencing a temporary hardship, these are not good long-term solutions. Why? Because in most cases, interest will continue to accrue (accumulate) on your loan while you’re not making payments and may be capitalized (cause interest to accrue on interest). When you resume repayment (which you will have to do eventually) your loan balance will probably be even higher than it was before. If you’re having financial trouble, why set yourself back even further by doing this? There are often better solutions available. Before choosing deferment or forbearance, ask about enrolling in an income-driven repayment plan. Under those plans, if you make little or nothing, you pay little or nothing. Additionally, with the income-driven repayment plans, you’re working toward loan forgiveness while making a lower payment. Before postponing your payments, consider your other options.

8. Take advantage of the FREE federal student loan assistance the government provides.
Contact your loan servicer

Each federal student loan borrower is assigned to a loan servicer (some borrowers may have more than one servicer, depending on the types of loans you have). Your loan servicer is a company that collects your student loan payments and provides customer service on behalf of the U.S. Department of Education. This is a FREE service. There are many companies out there who offer to help you with your student loans for a fee. Do not trust these companies. Remember: You never have to pay for help with your student loans. If you need advice, assistance, or help applying for one of our repayment programs, contact your loan servicer. They can help you for free. Just remember to keep your contact information up to date so they can reach you when they need to.

Student loans can seem overwhelming at first, but by taking this advice and setting up a repayment strategy that works for you, you’ll master your student loans in no time!

What to consider when choosing a personal loan

3Whether you are trying to consolidate your debts, booking an overseas trip or need the money to set up a nursery, we will show you what type of personal loans are available so you can feel comfortable choosing the right one, at the right price.

What to consider when choosing a personal loan
1. The benefits of a personal loan
2. Types of personal loans
3. How to get the best deal on your personal loan
4. Personal loan application Checklist
5. Star Ratings
1. The benefits of a personal loan
What’s the difference between a credit card and a personal loan, which both give you access to money you don’t have? The main benefit of a personal loan and what attracts many people to this option compared to a credit card, is that their interest rates are usually lower and you have an allocated time frame in which to pay the loan back. This means that it’s often easier to pay off and you could save you a lot of money in interest.

2. Types of personal loans
Secured, unsecured, variable, fixed? With lots of options can sometimes come confusion but it’s important to do your research and pick a loan type that is going to suit your personal needs. A few minutes of reading here could save you a few bucks too.

We have broken it down for you so that you can quickly, and hopefully easily, identify which person loan type is going to meet all your requirements.


If you are purchasing a new car or a large asset, then a secured loan may be for you. With this type of loan the asset in which you require the loan for, is used as security against the loan. Meaning that if you were to default on your repayments, the financial institution has the authority to repossess your asset, sell it and use the money to pay off your debt. These types of loans can sometimes be advertised at a lower interest rate than unsecured loans as they are seen as less risk to the lender.


If you are looking for some extra cash for your holiday, are consolidating your debts or renovating your home, an unsecured loan could do the job. An unsecured loan doesn’t require any security against the loan but as such, are considered a higher risk for the lender and therefore usually come with a higher interest rate than a secured personal loan. If this is your first loan, you may have to provide a guarantor on your application to guarantee that the repayments will be met.


Like the yin and yang there are positives and negatives to a variable loan but it all comes down to your personal preferences. A variable rate personal loan is a type of loan where the interest rate is not fixed and can fluctuate. Because of this, the repayments on this type of loan may go up and down depending on the lender’s discretion, which can make it difficult to set a budget. Benefits of this type of loan include if interest rates decrease, your repayments will be less, and in general variable rates are usually lower than a fixed rate. However if the rate increases your repayments will rise as a result.


Unlike variable rate loans, fixed rate personal loans offer a fixed interest rate throughout the length of the loan so you don’t have to worry about rate increases. This means that your repayments remain the same amount throughout the term of the loan, making it easier to manage your budget. The downside to having a fixed rate however is that if interest rates overall drop, because your interest rate is fixed it is unaffected, so effectively you may pay more than you need to.


The emergency fund of personal loans, this type of loan is one option available to make sure you have enough money in your account when you need it. It is a convenient way to have access to money quickly for those financial emergencies that pop up when you least expect it. You only pay interest on the money you use, however there is usually a maximum amount that you can apply for with this type of loan. The interest rate can be higher with this type of loan compared to other types of personal loans so make sure you compare.

Line of credit

This type of personal loan offers access to funds as you need them, allowing you to withdraw additional funds as required. The benefit is that you only pay interest on the money you use and not the total amount borrowed. Another good thing is that there is no need to reapply for another loan when you need more money, you can redraw on your available balance. A line of credit usually has a minimum and maximum amount that you can access, however the limit is usually higher than the maximum amount usually available with an overdraft loan.

3. How to get the best deal on your personal loan
Identifying the need, doing your research and shopping around will ultimately pay in dividends and lead you to uncovering the best personal loan for you.

If you have a loan amount in mind and have identified what type of loan you require then it’s time to get serious and start comparing. Comparing home loans doesn’t mean hours of leg work, instead kick your feet up and start comparing some of Australia’s best personal loans online. To use the RateCity personal loans comparison tool just visit our personal loans page, select which option you would like to search for, whether it’s just compare, low interest, or debt consolidation, then simply enter in the required information so that we can filter the search results to you.

The results will show a list of products that best suit your criteria. You can then further filter your search by comparing the interest rates and fees, and once you find one that best meets your criteria, you can apply online. Your chosen lender will then be in touch with you to notify you of the status of your application.

Easy! Hasn’t the internet changed our lives?

4. Personal loan application Checklist
Work out the amount you want to borrow.
Calculate how much you can afford to make in repayments.
Work out how long it will take to pay off, and how often you want to make the repayments (weekly, fortnightly or monthly.)
Decide whether you will require a secured (if buying an asset such as a car) or unsecured loan.
Will a fixed or variable rate personal loan suit you?
Compare personal loans online, look for one with a lower interest rate and lower fees.
Organise any documentation and paperwork that is required to support you application and have this ready.
That’s it! You are now ready to apply online.
5. Star Ratings
CANSTAR star ratings are a consumer-friendly benchmark that help you compare financial products based on their rates and features. We evaluate literally thousands of products from hundreds of finance institutions. Products offering superior value are awarded five stars.

Only the top 5% to 10% of products scored using the CANSTAR star ratings methodology are awarded the prestigious five star status. As a consumer, this is your guarantee of a high-performance product.

Cohort Default Rate Resources

2What is the Cohort Default Rate?

Colleges’ “cohort default rates” (CDRs) measure the share of their federal student loan borrowers who default within a specified period of time after entering repayment. Colleges with high CDRs may lose future eligibility for federal grants and loans. The most recent CDRs, released September 2015, are for borrowers who entered repayment in federal fiscal year 2012 (FY12) and defaulted in FY12, FY13, or FY14.

A student defaults on a federal loan after at least 270 days (nine months) of non-payment. Defaulting on a loan has several serious consequences, including adding significantly to the cost of a loan and ruining the borrower’s credit score. For colleges, defaulted loans are not generally counted in their cohort default rate until they are 360 days (nearly one year) overdue, leaving a gap of up to 90 days between when borrowers and colleges may first experience the consequences of default.

Most Recent Available CDRs


TICAS News Release on Official Three-Year (FY12) CDRs (September 2015)

Sortable CDR Spreadsheet (September 2015)
Three-year (FY12) CDRs by school — made easier to use and understand by TICAS’ Project on Student Debt. [Excel download, Microsoft 2007 or newer]
From the US Department of Education

US Department of Education news release on three-year CDRs (September 2015)

US Department of Education materials on FY12 three-year CDRs (September 2015)

CDR Tools & Resources


TICAS Participation Rate Index (PRI) Worksheet (September 2015)
This tool helps colleges with low borrowing rates understand whether they may qualify for exemptions from CDR sanctions, based on FY 2012 3-Year CDRs. [Excel download, Microsoft 2007 or newer]

Recommendations to Curb CDR Manipulation (September 2015)
Comments in response to Federal Register notice soliciting input on topics to be included in the U.S. Department of Education’s negotiated rulemaking. Recommendations to prevent CDR manipulation are on pages 10-17, and recommendations to provide equity to any borrowers whose defaults are removed from colleges’ CDRs are on pages 17-18.

TICAS Recommendations to Curb CDR Manipulation and Improve Participation Rate Index Appeals (October 2014)
Comments in response to the Federal Register notice soliciting input on topics to be included in the U.S. Department of Education’s negotiated rulemaking. Key recommendations include: preventing cohort default rate manipulation (pages 12-17); and increasing the efficacy of Participation Rate Index appeals by colleges with low borrowing rates (pages 18-19).

Protecting Colleges And Students: Community College Strategies to Prevent Default (July 2014)
Protecting Colleges and Students, released by the Association of Community College Trustees (ACCT) and The Institute for College Access & Success (TICAS), takes a unique look at student loan default at nine community colleges across the nation, and how those colleges are working to help students avoid default.

Recommendations to Curb CDR Manipulation (June 2013)
TICAS comments on CDR manipulation and what the Department can and should do to curb CDR manipulation on pages 14-19 of these comments on topics for negotiated rulemaking.

TICAS Memo on CDR Manipulation (August 2012)
Memo identifying steps the US Department of Education can and should take to prevent colleges from evading basic accountability measures designed to protect both students and taxpayers.

TICAS Letter on Importance of Borrowing Rates (August 2012)
Letter urging the Department of Education to provide the share of students borrowing alongside colleges’ default rates.

Ways to Pay Back Student Loans Faster

7Paying back your student loans can be intimidating. I know — when I was graduating from college and trying to find work and a place to live in an entirely new city, the thought of also having loans to pay back made me terrified.

But I’m here to tell you — don’t freak out. You can pay back your student loans. It might take time, yes, and probably determination. You will definitely need a plan. But making that plan is just one of the things this article will help you do — and it will also give you the tools to move from having thousands of dollars of student debt to being debt-free. You might even be able to do it faster than you expected.

But first, let’s talk about why you should try to pay your student loans off earlier than required.

The biggest benefit? You’ll save money. Let’s say you have a $30,000 loan with a 4.5% interest rate that you pay off over 20 years — you’ll pay $15,550 in interest. But if you pay it off in only 10 years, you’ll save $8,240. If you pay it off in five years, you’ll save $11,993. That’s enough money to buy a new car. Or, depending on where you live, a full year or two of rent.

Getting rid of your student loan debt also gives you a lot of freedom — the freedom to take a lower-paying job that you care about more, the freedom to travel, even the freedom to take on other “good” debts — like a mortgage for your first house.

It’s also important to note that defaulting on your student loan can have very serious consequences; in fact, not repaying student loan debt can be worse than not repaying other types of debt. Defaulting on your loans can ruin your credit score, making it difficult to do everything from signing up for basic utilities to renting an apartment. Your debt could increase thanks to accruing interest. And if you have federal loans, the government can add fees or even garnish your wages, forcing your employer to withhold money from your paycheck and send it directly to the government.

There are times when it is smarter to pay off other loans before student loans — if you have other debt with a higher interest rate, pay that down first, and it’s a very good idea to build an emergency fund of at least $1,000 as you start paying down student loan debt. But other than that, it can be really helpful to pay off your student loans as soon as possible. It’s not always easy, but it is doable. Follow the suggestions below to help speed up your student loan repayment.

The Top 10 Student Loan Tips for Recent Graduates

1Whether you just graduated, are taking a break from school, or have already started repaying your student loans, these tips will help you keep your student loan debt under control. That means avoiding fees and extra interest costs, keeping your payments affordable, and protecting your credit rating. If you’re having trouble finding a job or keeping up with your payments, there’s important information here for you, too.

1. Know Your Loans: It’s important to keep track of the lender, balance, and repayment status for each of your student loans. These details determine your options for loan repayment and forgiveness. If you’re not sure, ask your lender or visit www.nslds.ed.gov. You can log in and see the loan amounts, lender(s), and repayment status for all of your federal loans. If some of your loans aren’t listed, they’re probably private (non-federal) loans. For those, try to find a recent billing statement and/or the original paperwork that you signed. Contact your school if you can’t locate any records.

2. Know Your Grace Period: Different loans have different grace periods. A grace period is how long you can wait after leaving school before you have to make your first payment. It’s six months for federal Stafford loans, but nine months for federal Perkins loans. For federal PLUS loans, it depends on when they were issued (see details). The grace periods for private student loans vary, so consult your paperwork or contact your lender to find out. Don’t miss your first payment!

3. Stay in Touch with Your Lender: Whenever you move or change your phone number or email address, tell your lender right away. If your lender needs to contact you and your information isn’t current, it can end up costing you a bundle. Open and read every piece of mail – paper or electronic – that you receive about your student loans. If you’re getting unwanted calls from your lender or a collection agency, don’t stick your head in the sand – talk to your lender! Lenders are supposed to work with borrowers to resolve problems, and collection agencies have to follow certain rules. Ignoring bills or serious problems can lead to default, which has severe, long-term consequences (see tip 6 for more about default.)

4. Pick the Right Repayment Option: When your federal loans come due, your loan payments will automatically be based on a standard 10-year repayment plan. If the standard payment is going to be hard for you to cover, there are other options, and you can change plans down the line if you want or need to. Extending your repayment period beyond 10 years can lower your monthly payments, but you’ll end up paying more interest – often a lot more – over the life of the loan. Some important options for student loan borrowers are income-driven repayment plans such as Income-Based Repayment and Revised Pay As You Earn which cap your monthly payments at a reasonable percentage of your income each year, and forgive any debt remaining after no more than 25 years (depending on the plan) of affordable payments. Forgiveness may be available after just 10 years of these payments for borrowers in the public and nonprofit sectors (see tip 10 below). To find out more about Income-Based Repayment and related programs and how they might work for you, visit IBRinfo.org.

Private loans are not eligible for IBR or the other federal loan payment plans, deferments, forbearances, or forgiveness programs. However, the lender may offer some type of forbearance, typically for a fee, or you may be able to make interest-only payments for some period of time. Read your original private loan paperwork carefully and then talk to the lender about what repayment options you may have.

5. Don’t Panic: If you’re having trouble making payments because of unemployment, health problems, or other unexpected financial challenges, remember that you have options for managing your federal student loans. There are legitimate ways to temporarily postpone your federal loan payments, such as deferments and forbearance. For example, an unemployment deferment might be the right choice for you if you’re having trouble finding work right now. But beware: interest accrues on all types of loans during forbearances, and on some types of loans during deferment, increasing your total debt, so ask your lender about making interest-only payments if you can afford it.

If you expect your income to be lower than you’d hoped for more than a few months, check out Income-Based Repayment. Your required payment in IBR can be as little as $0 when your income is very low. See tip 4 for more about IBR and other repayment options.

6. Stay out of Trouble! Ignoring your student loans has serious consequences that can last a lifetime. Not paying can lead to delinquency and default. For federal loans, default kicks in after nine months of non-payment. When you default, your total loan balance becomes due, your credit score is ruined, the total amount you owe increases dramatically, and the government can garnish your wages and seize your tax refunds if you default on a federal loan. For private loans, default can happen much more quickly and can put anyone who co-signed for your loan at risk as well. Talk to your lender right away if you’re in danger of default. You can also find helpful information at studentloanborrowerassistance.org.

7. Prepay If You Can: If you can afford to pay more than your required monthly payment – every time or now and then – you can lower the amount of interest you have to pay over the life of the loan. To pay down your loan more quickly, make sure to include a written request to your lender specifying that the extra amount be applied to your loan balance, and continue making payments each month. Otherwise, your prepayment may automatically be credited to a future payment and you may not be billed for the next month.

8. Pay Off the Most Expensive Loans First: If you’re considering paying off one or more of your loans ahead of schedule, start with the one that has the highest interest rate. If you have private loans in addition to federal loans, start with your private loans, since they almost always have higher interest rates and lack the flexible repayment options and other protections of federal loans.

9. To Consolidate or Not to Consolidate: A consolidation loan combines multiple loans into one for a single monthly payment and one fixed interest rate. If this is appealing, here are some pros and cons to consider. You can consolidate your federal student loans through the Direct Loan program, and this calculator can help you figure out what your interest rate would be. For private consolidation loans, shop around carefully for a low or fixed interest rate if you can find one, and read all the fine print. Never consolidate federal loans into a private student loan, or you’ll lose all the repayment options and borrower benefits – like unemployment deferments and loan forgiveness programs – that come with federal loans!

10. Loan Forgiveness: There are various programs that will forgive all or some of your federal student loans if you work in certain fields or for certain types of employers. Public Service Loan Forgiveness is a federal program that forgives any student debt remaining after 10 years of qualifying payments for people in government, nonprofit, and other public service jobs.