KeyBank is one of the US finest financial institutions, and using their digital banking platform, Laurel Road, they have successfully helped many Americans refinance their student loans.
Taking loans to pay for college is not a novel idea. Over 44 million Americans have student loan debt, totaling over $1.5 trillion nationwide.
With the cost of higher education rising, student loans are an unfortunate necessity for many students.
But just because you need loans doesn’t mean you must struggle to repay them.
With the right loan servicer and repayment strategy, you can make managing your student loans much more manageable.
Keep reading to learn how KeyBank can help you take control of your student debt.
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Choosing Keybank as Your Loan Servicer
After you graduate, you’ll need to begin repaying your student loans. Your loan servicer is the company responsible for managing the repayment process.
KeyCorp is a financial services company headquartered in Cleveland, Ohio. They acquired Laurel Road as one of their brands in April 2019.
Laurel Road specializes in student loans, assisting undergraduates and postgraduates in refinancing over $4 billion in loans.
So why choose KeyBank? Here are some of the benefits KeyBank offers as a student loan servicer:
1. User-Friendly Experience
KeyBank invests heavily in digital tools and resources to provide an exceptional borrower experience.
Their online portal and mobile app allow you to easily view loan details, make payments, update contact information, and more. You’ll have access to your account 24/7.
They also offer excellent customer service. Their team of student lending experts is available by phone and chat if you have questions or need assistance.
1. Flexible Repayment Options
Life is unpredictable. KeyBank understands your financial situation may change after taking out your student loans.
They offer flexible repayment plans to match your budget and goals.
Options include:
- Deferment: Temporarily postpone payments if you enroll in school again or experience financial hardship.
- Forbearance: Reduce or temporarily pause payments for up to 12 months due to financial challenges.
- Graduated Repayment: Start with lower payments that increase over time as your income grows.
- Extended Repayment: Stretch out payments over 25 years for lower monthly costs.
KeyBank wants to work with you to create an affordable payment plan that meets your unique needs.
2. Interest Rate Reductions
KeyBank offers incentives like interest rate reductions when you set up auto-pay from your bank account.
This saves you money over the life of your loan. Rates may also decrease after you make a certain number of consecutive on-time payments.
3. No Prepayment Penalties
You can pay an extra monthly principal balance to repay your loans faster. KeyBank won’t charge a penalty for prepaying your private student loans.
This allows you to pay minimal interest costs over the life of the loan.
4. Credit-Building Opportunities
Student loans through KeyBank give you a chance to build your credit history. Regular on-time payments can establish healthy credit to qualify for better-term future loans.
Choosing the Right Repayment Strategy
Once you’ve selected KeyBank as your loan servicer, it’s time to pick the best repayment strategy.
KeyBank offers guidance to help you find a plan that fits your financial situation and goals.
Here are some of your options:
1. Standard Repayment
With standard repayment, you’ll pay a fixed monthly amount over a 10-year term. This plan gets your loans paid off as quickly as possible.
Standard repayment minimizes interest costs over the life of the loan. The downside is that it tends to come with higher monthly payments.
But if you can afford it, standard repayment is usually the best option financially.
2. Graduated Repayment
Graduated repayment starts with lower payments that increase every two years. This makes repayment more affordable early in your career when you earn less.
Payments are lower initially and higher over time as your income grows.
While this option postpones higher payments, you may ultimately pay more interest over the life of the loan. However, the lower initial payments provide flexibility when money is tight.
3. Extended Repayment
Extended repayment stretches payments over 25 years for dramatically lower monthly costs. This maximizes affordability, though you’ll pay more interest over time.
Extended repayment is best for those who need the lowest possible monthly payment. Just keep in mind you’ll be paying on your loans for an additional 15 years.
4. Pay as You Earn (PAYE)
PAYE caps monthly payments at 10% of your discretionary income and forgives any remaining balance after 20 years of repayment.
Discretionary income is minus 150% of the poverty guideline for your family size and state.
PAYE helps keep payments affordable for those with low incomes compared to their debt.
It’s a great option if you qualify. Monitor your payments to ensure you’re on track for forgiveness after 20 years.
5. Make the Most of Your Grace Period
After graduating, you’ll have a six-month grace period before needing to start repayment. Use this time to make a game plan for managing your loans.
Here are some tips:
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I. Review Your Loans
Log into your account and review your loan types, interest rates, and total balance owed. Having all the details will allow you to create a repayment strategy.
II. Research Repayment Options
Use KeyBank’s online tools and speak with a loan advisor to understand your repayment plan choices. Decide what works best for your situation.
III. Pick an Affordable Payment
Estimate your starting salary and budget to select a monthly payment amount you can afford. Avoid excessive financial strain.
IV. Consider Automatic Payments
Enrolling in auto-pay often lowers your interest rate. It also prevents missed or late payments.
V. Look Into Income-Driven Plans
If your debt is high relative to income, explore options like PAYE that base payments on what you can realistically pay each month.
VI. Consolidate Loans
You may be able to combine multiple federal loans into one, simplifying repayment. KeyBank can walk you through the consolidation process.
Repayment Tips and Strategies
Once your grace period ends, it’s time to begin repayment. Here are some tips for managing your monthly student loan bill:
1. Pay on Time Every Month
Set payment due date reminders and pay on time to avoid late fees and credit damage. Even one day late can result in penalties and interest capitalization.
2. Pay Extra When Possible
Making extra principal payments saves money on interest and pays loans off faster. Even small extras like rounding up your payment can make a difference over time.
3. Reassess Your Repayment Plan
Check-in yearly to ensure your repayment strategy fits your financial situation. Life changes may call for a plan adjustment.
4. Deduct Student Loan Interest
Take advantage of student loan interest tax deductions each year, up to $2,500 of interest paid. This deduction helps defray repayment costs.
5. Avoid Deferment Unless Necessary
Deferring payments postpones interest capitalization but increases total interest costs over the loan’s lifetime. Use deferment only if needed due to financial hardship.
6. Be Cautious With Forbearance
Forbearance lets you temporarily pause or reduce payments, but unpaid interest still accrues. Only use forbearance in emergencies when no better options exist.
7. Communicate With Your Servicer
Contact KeyBank any time you struggle to make payments. They can explain forbearance, deferment, or alternative repayment options to keep your loans in good standing.
8. Pay Extra Toward Highest Rate Loan
If you have multiple loans with different interest rates, put any extra payments toward the loan with the highest rate first. This saves the most on interest.
9. Automate Payments
Set up a direct debit through your bank account so payments are made on time without any effort. Automation prevents forgotten or late payments.
Staying disciplined and proactive with repayment protects your financial health as you work toward becoming student debt-free.
Read Also: Where Can a Student Get a Loan?
Seeking Lower Payments If You Struggle
A job loss, pay cut, or unforeseen expenses could make your student loan payment unaffordable.
Contact KeyBank immediately if you anticipate problems making payments on time. Be proactive so you don’t miss payments and damage your credit.
KeyBank has options to help with your student loans, including;
1. Deferment
Postpones payments up to 36 months. Qualifying hardship reasons include unemployment, economic hardship, military service, and furthering your education. Unpaid interest may capitalize.
2. Forbearance
Lets you temporarily stop making payments or pay a lower amount for up to 12 months. Unpaid interest still accrues.
3. Extended Repayment
Extends the repayment period from 10 to 25 years for smaller monthly payments. However, you’ll pay more interest over the full repayment term.
4. Graduated Repayment
Starts payments lower and increases incrementally every two years as your income rises. More flexible than standard repayment.
5. Unemployment Deferment
Pauses payments for up to 36 months if you can’t find a job after graduating. Must provide documentation.
6. Income-Driven Repayment
Lowers payments based on your disposable income and family size. Any remaining balance is forgiven after 20-25 years if payments don’t fully repay the debt.
The most important thing is communicating early with KeyBank at the first sign of financial hardship.
They have trained specialists who can walk you through all of your options. Don’t wait until you’ve already missed payments and hurt your credit.
7. Avoiding Delinquency and Default
Few things can sabotage your finances as quickly as delinquent and defaulted student loans.
Thankfully, KeyBank has flexible options to help prevent things from reaching that point:
8. Stay in Touch
Contact KeyBank immediately if you face challenges making payments. Waiting makes the problem worse.
9. Lower Your Monthly Payment
Extended, graduated, and income-driven repayment plans make payments more affordable.
Switching plans can help you avoid missed payments before your loans become delinquent.
10. Seek a Deferment or Forbearance
These programs allow you to temporarily stop making payments or pay a lower amount without becoming delinquent. Use them as a last resort if needed.
11. Request Late Fee Waivers
Missed payments incur fees, but KeyBank may waive them, especially if it’s your first time. Ask politely, explain your situation, and request fee removal.
12. Don’t Ignore Statements
Always review your monthly statements to know immediately if there are payment issues. Staying informed about loan status prevents surprises.
13. Sign Up for Alerts
KeyBank offers email/text alerts when payments are due and reminders if you become at risk of delinquency. Activate them so you never miss warnings.
14. Pay Automatically
Having your monthly payment directly debited prevents you from overlooking a payment and becoming delinquent. Set up auto-pay via your bank account.
Delinquency and default destroy credit, leading to denied loans, higher interest rates, and other financial headaches.
Protect yourself by taking advantage of KeyBank’s support systems at the first sign of repayment trouble.
Read Also: 10 Best New Year Resolutions for Students to Excel in 2023
Final Thought
Student loans don’t have to be a financial burden with the right guidance. KeyBank provides the tools and expertise to help you strategically repay your debt.
Their flexible options, robust resources, and dedicated support empower borrowers to take control of their loans. While student debt presents challenges,
KeyBank can partner with you for smart repayment solutions tailored to your needs and goals.
You have the power to manage your loans wisely. KeyBank will help you every step of the way.
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