Should I do Direct Debit on a $0.00 IDR?

Having an IBR and being on Direct Debit seems pretty useless doesn’t it?

You may be surprised to learn there are still benefits.

The first of these is the interest subsidy.  When you are one Direct Debit you receive a 0.25% interest rate reduction.  Now for IBR and PAYE plans interest is paid by the government.  But only for the first 3 years.  And only on subsidized loans.  For unsubsidized loans or after the 3 year mark, you are on your loan.  So why wouldn’t you want less interest to accrue?

Plus it will still be there for you when you need it.  Hopefully one day you’ll no longer being paying $0.00 a month (as this means you’ll be making more money!).  Your Direct Debit will not miss a beat as it just sits dormant until it is time to be used again.  But it will still be there saving you money while it does!

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