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How to pay your student loans

(MoneyWatch) A few days ago I wrote about 7 Ways to Find Free Money for College. November is National Scholarship Month, which marks a time when parents and their college students should begin looking for scholarships to help with tuition next fall.

Also this month, many graduates of the Class of 2013 will start repaying the money they borrowed for college. This is because their six-month grace period on their student loans will end. As they will begin repaying their loans, they will need to learn repayment strategies to strike the best "work/loan" balance, and also learn to budget.

Here is some important advice on how to manage and repay student loans, to help recent grads who are coming out of their six month grace period:

Understand Your Loans. There are many different types of student loans and most recent graduates have more than one. You don't need to be an expert on all the various types, but you do need to have an expert understanding of yours. Review the terms, interest rates and payment schedules. Create a spreadsheet or chart with the information for each loan, and sort from the highest interest rate to the lowest. Also, be sure your contact information (i.e., mailing address, email and phone number) on file with your servicer is accurate and up to date.

Select a Repayment Plan that Fits You. Federal loan borrowers may choose from a variety of payment plans, including income-driven repayment plans. Income-Based Repayment or Pay as You Earn are based on income and family size, and can cap monthly payments at 10 to 15 percent of income. Meanwhile, options for private loan borrowers depend on the loan program and the lender. Prior to disbursement of the loan, many private loan customers can select a repayment option that lets them begin to make payments while in school. The benefit of having done this is that they'll graduate with less debt and an already-established habit of making payments.

Set a Repayment Goal. According to student loan data, most borrowers pay off their loans on time or earlier. But there is a rising number of graduates who are struggling to repay. Some are in default. To meet your repayment goal, set a budget and stick to it. Use free tools online such as the Sallie Mae's Smart Option Student Loan Repayment Calculator. By paying more than the minimum on your student loans every month or whenever you can, you can pay off your loans sooner and also lower the total amount of interest you pay over the life of the loan.

Make Loan Payments When Due. Making your loan payments on time can help you build and maintain a good credit rating -- and avoid the extra expense of late fees. When you incur a $25 late fee on a payment of $125, that is a 20 percent interest cost on that one payment and over the course of a few years, this really adds up. Save time and money by enrolling in automatic bill payment. Borrowers who sign up for automatic debit may qualify for a .25 percentage point interest rate reduction while enrolled to make scheduled monthly payments.

Contact Your Loan Servicer. If you need help, know that the first place to turn should be your loan servicer. If you are experiencing financial difficulty and are going to miss a payment, call your loan servicer BEFORE you miss a payment. They can explore the options available and help you to keep your loans in good standing.