when taking out a loan you obtain money from a lender typically a company financial institution or government entity your agreement with the lender will specify the expectations for repaying your debt while the terms may vary here s a look at the primary forms of repayment for the most common types of loans 
federal student loansfederal student loans typically permit reduced or deferred payments and loan forgiveness in some instances plans for widespread forgiveness of federal student loans remain the subject of intense political debate and legal challenges 3whatever the long term outcome of student debt forgiveness these loans typically have some flexibility your options for student loan refinancing change as your life does this can be particularly helpful if you re facing a health or financial crisis standard payments are the best option regular payments at the same monthly amount and on a specified date each month until the loan plus interest is paid off regular payments satisfy the debt in the least amount of time also this method accrues the least amount of interest for most federal student loans this means a 10 year period of repayment 4other choices include extended and graduated payment plans 5 both involve paying back the loan over a longer period than the standard option unfortunately extended time frames go hand in hand with accruing additional interest charges during the deferral that will eventually need to be cleared extended repayment plans are just like standard repayment plans except the borrower has up to 25 years to pay back the money because this takes longer the monthly bills are lower however the interest fees can significantly increase the tab for the initial loan since they cover the additional time until the loan is settled graduated payment plans for student loans like graduated payment mortgages feature payments that start low and gradually increase over time this is meant to accommodate borrowers who are expected to earn higher incomes later in life graduated payment plans can offer a real benefit for those with limited earnings straight out of college as the initial payments can start as low as 0 per month however once again the borrower ends up with higher long term costs because payments are lower initially additional interest accrues over time increasing the overall loan balance 6student loan borrowers can explore if they are eligible for loan forgiveness among those who may qualify for debt relief are teachers service members peace corps and americorps volunteers first responders such as police officers and other emergency service workers government and tribal employees workers at certain nonprofit agencies and those who have made 20 or more years of payments toward their loans 7home mortgageshomeowners facing difficulties with their mortgages have some choices to stave off foreclosure borrowers with an adjustable rate mortgage may be able to refinance their loans as a fixed rate mortgage with a lower interest rate if the problem with payments is temporary borrowers can work toward reinstatement paying the lender the past due amount along with late fees and penalties by an agreed upon date payments are reduced or suspended for a set time if a mortgage goes into forbearance regular payments then resume along with a lump sum payment or additional partial payments for a specified period until the loan is cleared loan modifications offer another potential means of relief these are adjustments to the mortgage to make payments more manageable including lowering the interest rate extending the loan term or rolling missed payments into the existing loan balance sometimes a part of the mortgage may be forgiven reducing the overall debt under certain circumstances the most feasible solution may be to sell the home and use the proceeds to pay off all or part of the mortgage this strategy can help those behind on their payments to avoid bankruptcy for some selling the home may be the least worst option it can help those who have fallen behind on their payments to dodge the long term consequences of bankruptcy once in default depending on the jurisdiction and other factors the house could be seized as an asset anyway forbearance consolidation and debt reliefsome debts may qualify for forbearance a temporary relief that allows borrowers to pause or reduce payments because of financial hardship while this option can give you time to recover financially interest will continue to accrue during the forbearance period deferment choices also exist particularly for federal student loans for borrowers who are unemployed or whose income is too low to make payments it s best to communicate with lenders once events have affected your ability to cover your loan payments before your problems build further if you hold several federal student loans credit cards or other types of loans consolidation might be an option worth exploring consolidation combines separate debts into one loan typically with a fixed interest rate and a single monthly payment this could extend your repayment period and reduce the amount due for individual monthly payments the downside is that you will likely end up paying more in interest over the life of the loan an alternative to consolidation is debt relief not to be confused with federal debt forgiveness proposals using the same name 8 rather it s when a company negotiates with your creditors on your behalf debt relief or debt settlement is generally offered by for profit companies that charge a fee if they successfully get your creditors to reduce the total amount of your debt alternatively credit counseling agencies usually nonprofit firms can advise you on financial management and debt control while helping to restructure your debt payment schedule these agencies work with your creditors to lower your interest rates or waive certain fees including those for late payments and collections activities so your monthly debt payments are more manageable however they typically can t reduce how much is left of the debt you owe 2