Choose a goal below to determine your best option. Servicers manage student loans on behalf of the federal government and private lenders. Your servicer will contact you after the first federal loan is paid out to you. You can also use your online account to pay off the interest that has accrued before it capitalizes, or is added to your total balance at the end of the grace period. Six months after you leave school your first bill will arrive.
But be sure you have enough money in your bank account each month to cover the cost. Your servicer will place you on the year standard student loan repayment plan unless you pick a different one during your exit counseling session around the time you leave school.
The standard plan breaks up your balance into fixed payments. But that may be difficult to afford if you have a lot of debt. If you decide to switch, your servicer will process your application and annual income recertification , which you must submit to stay eligible.
Once you start earning enough money to pay extra toward your loans, you might want to pay off certain loans first — like the ones with the highest interest rates, which will help you save money in the long run. Contributing more than your scheduled payment will reduce both your overall balance and the interest you pay over time, so kick in a little more than you need to when you can.
Call, email or write your servicer a letter instructing it how to apply additional money. Otherwise they may apply extra payments toward your next month's bill. Call your loan servicer to let it know as soon as you can. You can apply for deferment or forbearance , temporary postponements of your payments during periods of financial difficulty.
You may be eligible for student loan forgiveness if you work in certain fields for a period of time. If you have an escrow account , which is a fund you pay into each month for the purpose of paying annual property taxes and homeowners insurance, your mortgage lender is responsible for making escrow payments. At closing, your lender must inform you of any plans to turn over the rights to administer your loan to a mortgage servicer, as often happens when a mortgage is sold.
The new servicer could be another lender, a bank, an investor or a third-party processing company that specializes in servicing mortgages. Over the term of your loan, you may have several mortgage servicers. After your mortgage servicer has changed, carefully examine your mortgage statements, making sure all payments have been recorded and taxes and insurance premiums have been paid on time.
Retain copies of letters, canceled checks and other paperwork relating to your mortgage and payments in case you need to document any dispute. How We Make Money. Natalie Campisi. Written by. Natalie Campisi is a former mortgage reporter at Bankrate. Share this page. Bankrate Logo Why you can trust Bankrate. Bankrate Logo Editorial Integrity. Key Principles We value your trust. Bankrate Logo Insurance Disclosure. How to find out who your mortgage servicer is Once you close on your mortgage, your mortgage servicer is responsible for questions pertaining to your loan.
When the servicer receives your payment, it distributes the money: Principal and interest go to the bank or the investor that owns the loan. Taxes go to the government. This 3 minute video offers highlights from the description of mortgage servicing below.
Effectively servicing a mortgage loan is critical to successful homeownership. If that is not possible, the servicer pursues a loan modification if the homeowner is eligible or explores an alternative to foreclosure, such as a short sale or deed in lieu of foreclosure. What Is a Mortgage Servicer?
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