How to Get Started With Making Your First Loan Payments after You Graduate?

Taking out a loan is a great way to get the funds that you need to make expensive purchases, pay for medical procedures, to renovate your home, and the money can even be used to pay your taxes or pay for college. Over the years, lenders have come up with dozens of types of loans, in order to cater to the needs of different types of individuals. One of the most popular types of loans currently in use is the one meant to pay for a college education.

College loans are for many the only way to pay for their tuition, and a large number of lenders have included them in their offer, competing by offering better interest rates or smaller monthly payment systems. Regardless of which lender you borrow from, all individuals usually get a grace period of six months to get a job, figure out a monthly budget, and start making the monthly payments on the loan.

It all sounds very simple, however, as most college graduates find out, it is difficult to find a job, find a place to live, create a functional budget, and keep track of the monthly payments that you have to make on your loan. This having been said, figuring things out and starting to make your first loan payments isn’t impossible, provided that you know a few important tips. Here is how you can start to make the payments on your loan:

Know who your loan service is

The loan servicer is, for all intents and purposes, the company that collects the monthly payments that you make and manages your student loan. This company is tasked with sending you a payment notice one month before the first due date. However, this is a formality and may sometimes be skipped. If you have taken a federal student loan and have not yet been contacted by the loan service, you will have to start doing research on your own.

Where to find information about your student loan

The easiest way to figure out when your first due date is and how much you have to pay is by checking your borrowing history at the National Student Loan System website. The platform contains a list of all your federal student loans, along with how much you own and the loan servicers for each of them. You can use the website to contact them if they have not yet reached out to you and make sure that you have all the information needed to repay the money.

This having been said, if you have taken out a student loan from a private bank or lender, you will not be able to use this platform. Instead, you must contact each of the lenders that you have borrowed money from and ask for information regarding how and when you must make the monthly payments.

Know what your options are

When contacting the lenders, inquire about what repayment plan you are enrolled in. Most companies will default to a 10-year repayment plan which is, incidentally, also the most affordable overall. However, if you cannot make those payments, you can also switch to other plans that are easier to deal with. In most cases, the new plan will be based on your monthly income, making it easier for you to create a monthly budget.

If you have taken out a federal student loan, you will be able to calculate the alternative payments using the repayment estimator tool found on the Education Department’s online platform.

By opting for an alternative payment plan, you will make smaller payments, but it will take longer to repay all the money that you’ve borrowed. This may be more expensive in the long run due to the additional payments that will also carry interest.

You should also ask your employer if he is willing to offer any assistance. There are currently thousands of companies that offer help with the student loans that their young employees have to pay. These businesses often recruit their personnel directly from university campuses. Functionally speaking, the companies that are part of these help programs offer an additional $100-$200 to the employees who have student loans, in order to make it easier for them to make their payments.

Is the interest that you pay on student loans deductible?

Yes, it is. However, this depends on how much money you’re making. Generally speaking, you can deduct up to $2,500 in interest on any federal or private college loan that you’ve taken out on your tax returns, as long as you qualify. It is also important to mention that the deductions do not need to be itemized.

Is it a good idea to refinance college loans?

If you have taken out a federal loan, it will come with consumer protections that are designed to help you. Refinancing them is usually a bad idea. However, if you’ve taken out a private loan and you find that you can get a better deal by refinancing it, this may help you in the long run.


Overall, if you’ve just graduated from college, you should immediately get in touch with your loan service company and ask how much breathing time you have. Next, see if your employer offers any help to graduates that have to pay off student loans. Lastly, look for alternative payment plans that can make it easier to budget your income. Also, don’t forget to deduct the interest that you pay on the loan.

If you find that you either cannot make the monthly payments or that you can get a better deal through a different type of loan, refinancing your college loan is a possibility, but it is important to keep in mind that the debt will still have to be paid, and the longer time it takes you to repay the whole amount, the more it will restrict your financial possibilities.