Interest only or full payment

[Devaskyla]

I apparently can't get interest relief for one of my student loans anymore. I can either make regular payments or I can go on interest only payments for 6 months. They've already had over 1/2 my loan in interest thanks to the interest relief payments from the government & I'm sick of having this hanging over my head (although apparently it's going to take *8* years to pay off). We can probably stretch to the full amount (it's about $75 more than the interest only payments), but some months it might be difficult. On the other hand...it would be awesome to get rid of this debt. I still have 2 other loans hanging over me that are still in interest relief (& one paid off).

What should I do?

[Devaskyla]

[CarrieMF]

I'd start paying the full amount & anything extra if you can. If you can only put the full amount on, then any month you have extra money put it into a savings account to cover the months you may not have extra money to pay the full amount. The earlier you can pay them off the better.

[cristina47454]

DO you have the option of choosing interest only, but sending in extra money if you have it? Would they apply anything over the interest only amount to the principle? Tell yourself that you NEED to send in the extra $75 though...don't spend the "extra" money if you have it at the end of the month on an increased food budget or new clothes. Money sometimes has a way of just disappearing (I know!!) if you are not careful with it.

Also, what happens after 6 months??

[sanguine_speed]

Which province are you in? Loan repayment rules vary by province.

Anyhow, I'm sorry to hear you aren't eligible for interest relief anymore.
Under the Canada Student Loans portion, there is an income-contingent repayment plan. This is also available on Ontario loans. You might want to check it out for the Canada portion if you're not in Ontario:
http://www.hrsdc.gc.ca/eng/learning/...loan/rap.shtml
Beginning on August 1, 2009, the new federal Repayment Assistance Plan (RAP) will be available to borrowers who are having difficulty paying back their student loan debt. The Plan makes it easier for student loan borrowers experiencing financial hardship to manage their student loan debt. Student loan payments are based on what the borrower can reasonably afford based on their family income and family size.

[Devaskyla]

I'm in Alberta. My Canada loans are still on interest relief, it's just a very old provincial one that isn't anymore (it's held by a bank, if that gives you an idea how old it is)

I'm pretty sure we can pay extra on our loans at any time to bring down the principal. I should double check on that, because that's a good idea. Then if we don't have extra for it, I won't have to worry about it. I'll try calling them when I get back from taking ds2 to school.

After 6 months, I reapply and either get interest relief again (unlikely), interest only payments or full payments.

[lalaland42]

If you can make full payments, why would you pay less? All you will be doing is stretching out the pain of the student loans. I feel you though, I was complaining about my student loan payments yesterday.