The Ultimate Checklist for 2018 Grads Preparing for Student Loan Payments

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For all the knowledge you gained in college, you might feel uneducated and unprepared about how to handle your student loan payments once you graduate. After all, that grace period after graduation when you don’t have to make student loan payments won’t last forever.

With the average graduate’s monthly payment hovering around $351, you might find yourself scrambling to pay that bill if you’re not prepared for it. Luckily, our seven-step checklist below will get you ready to tackle your payments. That way, you can stay on track as you work toward being debt-free.

Here are seven actionable steps you should take before making that first payment.

Step Note Done? ✔
1. Complete exit counseling Federal student loan borrowers are required to take a course on student loan repayment before graduation. If you have private loans, research your repayment options.
2. Make the most of your grace period Make sure you know when the grace period for each of your student loans ends. Learn how much you owe and to which student loan servicers.
3. Review or change your repayment plan You might be stuck with your repayment plan for private student loans. But you could tie your federal student loan payments to a percentage of your income if you meet certain qualifications.
4. Budget for loan payments Whether you already have a job or not, figure out how your student loan payments will fit in with your other postgraduate expenses.
5. Set up autopay Sign up for automatic payments. Many loan servicers offer an interest rate discount if you do.
6. Track your credit score As you approach your first student loan payment, find your credit score for free online. Then, start tracking its progress as you improve your debt-to-income ratio.
7. Set a goal for your last payment Once you complete the first six steps of our checklist, you’re ready to set a long-term goal for ending your student loan debt.

1. Complete exit counseling

When you graduate or leave school, you’re required to complete exit counseling for your federal student loans.

You can complete the counseling in 20 to 30 minutes at StudentLoans.gov. You’ll need to track down or create a new Federal Student Aid ID to sign up.

The counseling might seem as boring as taking a defensive driving course online, especially if it goes over what you already learned as a freshman when you went through entrance counseling.

Whether it serves as a refresher course or seems like new material, exit counseling is important because it will review the following:

  • The basics of how student loan interest works
  • Student loan repayment plans that are available to you
  • Strategies you can use to avoid defaulting on your loans
  • Financial tips on budgeting, saving, and improving your credit score

If you’re solely a private student loan borrower, there’s no requirement to undergo postgraduate counseling. But if you want to understand your student loan repayment situation, contact your lender and ask them about:

  • Your interest rate and estimated monthly payment
  • Your first payment due date
  • The terms of your grace period after graduation

2. Make the most of your grace period

As you learned during exit counseling, most federal student loans come with a grace period.

You have six months from the date of your college graduation before your first federal student loan payment becomes due. Many top private student loan companies, such as CommonBond, offer their borrowers the same benefit.

No matter how much time you have left, make the most of your grace period by:

  • Finding your servicer: Federal student loan borrowers can go to the National Student Loan Data System to find their servicer. Fun fact: You might have more than one federal loan servicer. Each federal loan is assigned to one of nine servicers after it’s paid out.
  • Creating an account with your servicer: Learn exactly how much you owe and what interest rates your loans have. Unless you only took out a Direct Subsidized Loan, your loan amount likely accrued interest while you were busy going to class.
  • Talking with your servicer: Open up lines of communication by asking about your repayment plan options and first payment due date. If you have multiple servicers, track them down and speak with each of them.

3. Review or change your repayment plan

If you have multiple federal student loans, you might find it difficult to repay them on the 10-year Standard Repayment Plan you initially received.

You could opt to lower your monthly payment by switching to one of the income-driven repayment (IDR) plans available to federal student loan borrowers. Your payment would increase or decrease annually, depending on how your income changes. If you go this route, you’ll need to recertify your income annually. So, create a calendar alarm to ensure you don’t miss the deadline.

Say you switch to an Income-Based Repayment (IBR) plan. It could limit your monthly payment to around 10% of your discretionary income. But it would also increase how much interest you’d pay over time.

Moving a $30,000 loan debt with a 5.70% interest rate to an IBR plan, for example, could shrink your monthly payment from $328 to $58. But you’d pay an additional $3,707 over your 20-year repayment term before qualifying for loan forgiveness, according to our IBR calculator.

If you have multiple loans with different federal loan servicers, you could also explore a Direct Consolidation Loan. It groups your federal student loans into one larger loan but won’t lower your average interest rate. In fact, it would be a weighted average of your existing loan rates.

Say you have one $5,000 loan at 5.00% and another $5,000 loan at 6.00%. Your Direct Consolidation Loan rate would be about 5.50%.

Before switching repayment plans or consolidating your federal student loans, understand that the following could change:

  • Your monthly payment
  • The length of your repayment term
  • The amount of interest you’ll pay over that term
  • Your access to student loan forgiveness

You can use the Repayment Estimator tool from the Department of Education (DOE) to choose the best plan for you. First, you enter your loan information into the tool. Then, it’ll spit out what your repayment would look like under each plan you’re eligible for.

For private loans, you’re likely stuck with the repayment plan you selected when you first took out your loan. Your options probably included making in-school payments to stay on top of accruing interest or deferring payments until graduation.

4. Budget for loan payments

Even if you switched to an IDR plan, you’ll need to get a handle on the dollar amount of your monthly payment.

Make it a line item on your budget of expenses. Your list could include:

  • Student loan payments
  • Groceries
  • Rent
  • Transportation costs
  • Monthly bills, such as utilities, cable, and phone

Then, calculate your income. If your first job out of college pays you every two weeks, multiply the after-tax amount by 2. To ensure you’re earning enough money to account for student loan payments and other essential expenses, use the following calculation:

Income – Expenses = Savings

If the equation leaves you with more savings than you need to start an emergency fund, consider increasing your loan payment. It’s one of the surefire ways to pay off your loans faster.

But if you’re not left with any savings after subtracting your expenses from your income, you might have to make some sacrifices. If you drive to work, for example, you could consider ditching the car and its fuel costs for public transportation.

If you want to increase your income, look for the best side hustle to bring in some cash.

5. Set up autopay

Whether you’re working with a federal loan servicer or a private lender, you’ll have the option of setting up automatic payments.

Once you supply your bank account information, your servicer will charge that account for the amount you set. It’s the simplest of ways to make your first payment.

Although it won’t feel great to have your servicer dipping into your bank account, it will ensure you don’t miss a payment. You’ll just need to make sure you have enough cash in your bank account every month to cover the payment.

The other benefit of autopay is that many lenders, including the DOE, offer a 0.25% interest rate reduction when you sign up.

If your budget leaves you little margin for error, you might opt to manually pay your servicer each month. To avoid a late payment, set a reminder for yourself. You can create recurring alarms using mobile apps like Google Calendar.

6. Track your credit score

Even before you make your first student loan payment, you should find your credit score for free online.

Once you start making timely student loan payments, you should see your credit score creep up. Chipping away at your debt makes up to 35% of your credit score, according to FICO.

If you improve your credit score significantly, you also open the door for refinancing your student loans later on. Student loan refinancing companies can help creditworthy borrowers consolidate their older loans into one new loan. Unlike with a Direct Consolidation Loan, you could score a lower interest rate by refinancing your federal and private loans.

Many lenders require potential refinancing borrowers to have a minimum credit score of 660 to 700. But you’ll need an even higher score if you hope to receive an especially low student loan refinancing interest rate.

Having steady income would also help you score a lower interest rate. Just be sure you’re OK with missing out on exclusive federal student loan borrower protections when you refinance your loans with a private lender.

7. Set a goal for your last payment

Letting autopay run its course will keep you on track with making monthly student loan payments. But to truly rid yourself of student loan debt on your own terms, you’ll want to stay on top of your finances.

Say you earn a raise at work or receive a big tax return. You could adjust your budget so you can increase your monthly student loan payment or make a big one-time payment to bring you closer to being debt-free.

To ensure you end your student loan debt in a timely fashion, set a goal for the date of your last payment. You could tie your goal to your age and plan to be debt-free before turning 35, for example.

Then, you can focus on achieving other big financial goals, like starting a business or buying a home.

Interested in refinancing student loans?

Here are the top 6 lenders of 2018!
LenderVariable APREligible Degrees 
Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Earnest.

Earnest Disclosures

To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.

Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 6.97% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 6.30% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.

Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.

The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at hello@earnest.com, or call 888-601-2801 for more information on ourstudent loan refinance product.

© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.


2 Important Disclosures for Laurel Road.

Laurel Road Disclosures

APR stands for “Annual Percentage Rate.” Rates listed include a 0.25% EFT discount, for automatic payments made from a checking or savings account. Interest rates as of 11/8/2018. Rates subject to change.

Variable rate options consist of a range from 3.27% per year to 6.09% per year for a 5-year term, 4.64% per year to 6.14% per year for a 7-year term, 4.69% per year to 6.19% per year for a 10-year term, 4.94% per year to 6.44% per year for a 15-year term, or 5.19% per year to 6.69% per year for a 20-year term, with no origination fees. APR is subject to increase after consummation. The variable interest rate will change on the first day of every month (“Change Date”) if the Current Index changes. The variable interest rates are based on a Current Index, which is the 1-month London Interbank Offered Rate (LIBOR) (currency in US dollars), as published on The Wall Street Journal’s website. The variable interest rates and Annual Percentage Rate (APR) will increase or decrease when the 1-month LIBOR index changes. The variable interest rates are calculated by adding a margin ranging from 0.98% to 3.80% for the 5-year term loan, 2.35% to 3.85% for the 7-year term loan, 2.40% to 3.90% for the 10-year term loan, 2.65% to 4.15% for the 15-year term loan, and 2.90% to 4.40% for the 20-year term loan, respectively, to the 1-month LIBOR index published on the 25th day of each month immediately preceding each “Change Date,” as defined above, rounded to two decimal places, with no origination fees. If the 25th day of the month is not a business day or is a US federal holiday, the reference date will be the most recent date preceding the 25th day of the month that is a business day. The monthly payment for a sample $10,000 loan at a range of 3.27% per year to 6.09% per year for a 5-year term would be from $180.89 to $193.75. The monthly payment for a sample $10,000 loan at a range of 4.64% per year to 6.14% per year for a 7-year term would be from $139.65 to $146.76. The monthly payment for a sample $10,000 loan at a range of 4.69% per year to 6.19% per year for a 10-year term would be from $104.56 to $111.98. The monthly payment for a sample $10,000 loan at a range of 4.94% per year to 6.44% per year for a 15-year term would be from $78.77 to $86.78. The monthly payment for a sample $10,000 loan at a range of 5.19% per year to 6.69% per year for a 20-year term would be from $67.05 to $75.68.

However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.


3 Important Disclosures for SoFi.

SoFi Disclosures

  1. Student loan Refinance: Fixed rates from 3.899% APR to 7.979% APR (with AutoPay). Variable rates from 2.470% APR to 6.990% APR (with AutoPay). Interest rates on variable rate loans are capped at either 8.95% or 9.95% depending on term of loan. See APR examples and terms. Lowest variable rate of 2.470% APR assumes current 1 month LIBOR rate of 2.30% plus 0.91% margin minus 0.25% ACH discount. Not all borrowers receive the lowest rate. If approved for a loan, the fixed or variable interest rate offered will depend on your creditworthiness, and the term of the loan and other factors, and will be within the ranges of rates listed above. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. *To check the rates and terms you qualify for, SoFi conducts a soft credit inquiry. Unlike hard credit inquiries, soft credit inquiries (or soft credit pulls) do not impact your credit score. Soft credit inquiries allow SoFi to show you what rates and terms SoFi can offer you up front. After seeing your rates, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit inquiry. Hard credit inquiries (or hard credit pulls) are required for SoFi to be able to issue you a loan. In addition to requiring your explicit permission, these credit pulls may impact your credit score.
  2. Terms and Conditions Apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)

4 Important Disclosures for LendKey.

LendKey Disclosures

Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.


5 Important Disclosures for CommonBond.

CommonBond Disclosures

Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.

All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.28% effective October 10, 2018.


6 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  1. Education Refinance Loan Rate Disclosure: Variable rate, based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of November 1, 2018, the one-month LIBOR rate is 2.29%. Variable interest rates range from 2.79%-8.39% (2.79%-8.39% APR) and will fluctuate over the term of the borrower’s loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a cosigner. Fixed interest rates range from 3.75%-8.69% (3.75%-8.69% APR) based on applicable terms, level of degree earned and presence of a cosigner. Lowest rates shown require application with a cosigner, are for eligible, creditworthy applicants with a graduate level degree, require a 5-year repayment term and include our Loyalty discount and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty and Automatic Payment Discount disclosures. The maximum variable rate on the Education Refinance Loan is the greater of 21.00% or Prime Rate plus 9.00%. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change. Please note: Due to federal regulations, Citizens Bank is required to provide every potential borrower with disclosure information before they apply for a private student loan. The borrower will be presented with an Application Disclosure and an Approval Disclosure within the application process before they accept the terms and conditions of their loan.
  2. Federal Loan vs. Private Loan Benefits: Some federal student loans include unique benefits that the borrower may not receive with a private student loan, some of which we do not offer with the Education Refinance Loan. Borrowers should carefully review their current benefits, especially if they work in public service, are in the military, are currently on or considering income based repayment options or are concerned about a steady source of future income and would want to lower their payments at some time in the future. When the borrower refinances, they waive any current and potential future benefits of their federal loans and replace those with the benefits of the Education Refinance Loan. For more information about federal student loan benefits and federal loan consolidation, visit http://studentaid.ed.gov/. We also have several resources available to help the borrower make a decision at http://www.citizensbank.com/EdRefinance, including Should I Refinance My Student Loans? and our FAQs. Should I Refinance My Student Loans? includes a comparison of federal and private student loan benefits that we encourage the borrower to review.
  3. Citizens Bank Education Refinance Loan Eligibility: Eligible applicants may not be currently enrolled. Applicants with an Associate’s degree or with no degree must have made at least 12 qualifying payments after leaving school. Qualifying payments are the most recent on time and consecutive payments of principal and interest on the loans being refinanced. Primary borrowers must be a U.S. citizen, permanent resident or resident alien with a valid U.S. Social Security Number residing in the United States. Resident aliens must apply with a cosigner who is a U.S. citizen or permanent resident. The cosigner (if applicable) must be a U.S. citizen or permanent resident with a valid U.S. Social Security Number residing in the United States. For applicants who have not attained the age of majority in their state of residence, a cosigner will be required. Citizens Bank reserves the right to modify eligibility criteria at anytime. Interest rate ranges subject to change. Education Refinance Loans are subject to credit qualification, completion of a loan application/consumer credit agreement, verification of application information, certification of borrower’s student loan amount(s) and highest degree earned.
  4. Loyalty Discount Disclosure: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower or their co-signer (if applicable) has a qualifying account in existence with us at the time the borrower and their co-signer (if applicable) have submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, or other student loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI, and VT and some products may have an associated cost. This discount will be reflected in the interest rate disclosed in the Loan Approval Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  5. Automatic Payment Discount Disclosure: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their student loans owned by Citizens Bank, N.A. during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. Discount is not available when payments are not due, such as during forbearance. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account three or more times within any 12-month period, the borrower will no longer be eligible for this discount.
  6. Co-signer Release: Borrowers may apply for co-signer release after making 36 consecutive on-time payments of principal and interest. For the purpose of the application for co-signer release, on-time payments are defined as payments received within 15 days of the due date. Interest only payments do not qualify. The borrower must meet certain credit and eligibility guidelines when applying for the co-signer release. Borrowers must complete an application for release and provide income verification documents as part of the review. Borrowers who use deferment or forbearance will need to make 36 consecutive on-time payments after reentering repayment to qualify for release. The borrower applying for co-signer release must be a U.S. citizen or permanent resident. If an application for co-signer release is denied, the borrower may not reapply for co-signer release until at least one year from the date the application for co-signer release was received. Terms and conditions apply.

2.47% – 6.99%3Undergrad
& Graduate

Visit SoFi

2.47% – 6.30%1Undergrad
& Graduate

Visit Earnest

2.51% – 8.09%4Undergrad
& Graduate

Visit Lendkey

3.02% – 6.44%2Undergrad
& Graduate

Visit Laurel Road

2.69% – 7.21%5Undergrad
& Graduate

Visit CommonBond

2.79% – 8.39%6Undergrad
& Graduate

Visit Citizens

Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.