The length of the repayment period depends on the loan amount. Standard Repayment usually results in the lowest total interest paid because the repayment period is shorter than other payment options. Extended Repayment -Terms change from the standard 10 years to a period of up to 30 years, with payments fixed for the life of the loan, and monthly payments are typically less than under the Standard Repayment option As with Standard Repayment, the length of the repayment period depends on the total debt owed. Although this option will make repayment more manageable, borrowers will likely pay more interest as the repayment period is longer. Graduated Repayment -Payments start out low, then gradually rise at a predetermined rate.
Borrowers often pay only interest the first few years.
This option may be helpful to borrowers whose incomes are low initially but will increase steadily. As with the Extended Repayment option, the repayment period will vary from 10 to 30 years, depending on the total amount borrowed. Again, monthly payments may be more manageable, but borrowers will pay more interest because the repayment period is longer. Income Contingent Repayment -Monthly payments are based on the borrower's income and the total amount of loans borrowed. As the borrower's income rises or falls each year, monthly payments will be adjusted accordingly.