This plan also can extend the payback period by five years. However, lengthening the payback period will increase long-term interest costs. Extended repayment - This plan allows borrowers to reduce the amount of their monthly payment by spreading their payments over a period of up to 25 years. Because borrowers will make payments over a longer period of time, total interest costs will be higher under this plan compared to level, graduated, and income-sensitive repayment plans. They may prefer the convenience of a central payment.
Some borrowers consolidate to stretch their loan payments.
This method allows borrowers to lower the amount of each monthly payment, but increases the length of the repayment period to as long as 30 years. This method can help those with large loan balances establish an affordable monthly payment, but it does increase long-term interest expenses. Whichever option you choose, prepaying some of your loan principal can save you money in the long run. You can prepay a loan at any time and shorten the payback period by accelerating payments paying more than the scheduled payment each month. Prepayment or accelerated repayment can cut interest costs substantially, as the USA Group student loan prepayment calculator shows.