Choosing to pay your federal loans under an income-driven repayment plan will give you an affordable monthly payment. But it can affect other parts of your life.
Which income-driven repayment plan has the lowest interest? The IDR Plan you choose does not determine your interest rate. The loans you’re paying under an IDR Plan control your interest rate. Having said that, the Revised Pay As You Earn Plan offers borrowers an interest subsidy, whereby the federal government will cover some of the interest that accrues on your subsidized and unsubsidized Direct Loans.
How does income-driven repayment change when you get married? When you get married, your monthly student loan payment under an income-driven repayment may change depending on how you file taxes and which payment plan you’re in. The IBR Plan will count your spouse’s income if you file your tax return jointly. Meanwhile, the REPAYE Plan will count your spouse’s income no matter if you file taxes jointly or separately.
Does income-driven repayment affect credit score? Income-driven repayment plans don’t affect your credit score because you’re getting a new loan, changing your loan balance, or opening a new credit account. But being in an IDR Plan can make it harder to qualify for a home loan because your outstanding balance will grow over time with accrued interest.
Is IBR forgiveness for real? Student loan forgiveness under the IBR plan after 20 to 25 years of payments is real. The federal government will forgive the remaining balance on your loans after making 20 to 25 years of payments under an income-driven repayment plan.