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Different Types of Loan Payment Plans Explained

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Lifestyle - RSV News originally published at Lifestyle - RSV News

Different Types of Loan Payment Plans Explained

NEW YORK, March 6, 2023 (Newswire.com) - iQuanti: For anyone trying to figure out how loan payments work, determining the most affordable payment plan can be overwhelming. Luckily, there are a number of loan payment options available to fit nearly any budget.

It can be helpful to use a loan payment calculator to get an accurate estimate of what your loan payments would look like under each plan. Take your loan balance and annual interest rate into consideration when making your selection so you can make the best choice for your financial situation. 

In this article, we'll explain five different types of loan payment plans and when to apply for them.  

1. Deferments and forbearance 

Borrowers who struggle to make monthly installment payments do have alternative options for repayment. One is to ask for a deferment, which takes the next payment and moves it to the end of the loan term, essentially giving you a month off. Another is forbearance, which is a request to freeze payments due to financial difficulties.  

2. Extended Payment Plan 

Some lenders offer extended repayments for borrowers with over a certain amount in total debt. The extension simply stretches the term of the loan by a certain number of years. For instance, a five-year loan where you're paying $300 a month could be extended out to ten years, cutting that monthly payment in half. This is also known as loan refinancing.   

3. Graduated Payment Plan  

This type of payment plan is designed for borrowers in lower income brackets who expect to make more as they progress through their career path. Graduated payments are common in the student loan sector, where new graduates take entry-level jobs at companies they can grow with. Lenders know their income will go up, so they're willing to work with them.

4. Income-Based Payment Plan 

Income-based payment plans are exactly what they sound like. The amount of your monthly installment payment is based on your income. Unlike graduated payments, income-based payments are capped at a certain percentage of discretionary income, so the number could go up or down each month, depending on your financial circumstances.  

5. Pay-As-Your-Earn Plan (PAYE) 

PAYE plans are the big brother of income-based plans. The cap percentage is lower, and interest is limited to 10% of the principal amount owed. You generally won't see this with traditional loans, but students should investigate it. Most student loan lenders offer PAYE or income-based payment plans for student loan borrowers.    

The Bottom Line  

Missed payments on an installment loan can have a negative impact on your credit score and affect your ability to borrow in the future. Some of the options we've listed here may not be available from your lender. If they are, you may not see them advertised. Ask your lender about deferments and forbearance. Extended payment plans, graduated payment plans, income-based payment plans, and PAYE plans can also provide financial relief when you need it.  

Whether you're paying off a personal loan, student loan, or consolidation loan, it's important to research alternative payment options when it looks like you're falling behind. Don't wait until you've already missed a payment. 

Contact Information:
Keyonda Goosby
Public Relations Specialist
keyonda.goosby@iquanti.com
(201) 633-2125


Original Source: Different Types of Loan Payment Plans Explained Different Types of Loan Payment Plans Explained

Lifestyle - RSV News originally published at Lifestyle - RSV News

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NEW YORK, July 18, 2024 (Newswire.com)
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Tiny Souls Media Inc., a start-up specializing in children’s media and educational resources for caregivers, launched its first episodes of an original preschool animated series entitled Zip and the Tiny Sprouts last month on YouTube. The series is written and directed by K Love You Bye’s Peter Johnston and Kyle Logan with Chris Bennett (Bluey) as animation director. Zip and the Tiny Sprouts aims to entertain young audiences while supporting their learning and social-emotional development. The series will feature 26 seven-minute episodes set in the whimsical Harmony Hollow, released every other weekend on YouTube and the YouTube Kids app. Additional content such as sing-alongs and craft videos are also featured on the channel to help families learn and grow together.

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The show has already become a YouTube sensation with the first five episodes garnering over 1.5 million views within the first month of its release. “The reception to it has been just wonderful. But there’s no time to rest. Our journey is just getting started and we’ve got lots of funny, heartfelt and thoughtful stories to share,” said Animation Director and writer Chris Bennett.

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Contact Information:

Elyse Averbach

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press@tinysoulsmedia.com



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New Parenting Course App and Original Preschool Animated Series ‘Zip and the Tiny Sprouts’ Launched by Tiny Souls Media

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