W.ith another extension of the federal student loan payment freeze, it can be tempting to put all thoughts about your debt off your mind by May 1.

However, those additional three months of suspension could serve as a critical time in preparation for their return, which President Biden urged borrowers to come when he announced the extension in late December. Because one thing is (almost) certain: the installments for the student loan will come back at some point. And before doing that, it might be a good idea to sign up for auto payment.

This is how you can tell if it’s a good idea for you.

Advantages and Disadvantages of Autopay for Student Loans

After about two years in an automatic deferral, it can be easy to turn away from paying monthly installments on the student loan. According to Leslie H. Tayne, finance attorney and founder of the Tayne Law Group, autopay, or automatic direct debit payments, can be a great option for borrowers who want to “set and forget” with one less bill to think about every month.

“If you haven’t set up automatic payment, you run the risk of forgetting to pay a student loan, which can lead to penalties and credit defaults,” she says.

Another reason to enroll: you can get a lower interest rate. Most student loan providers offer a 0.25% discount to borrowers who automatically pay their bills. This applies to both federal and personal loans. It might not seem like much – and it really isn’t – but the savings can add up over time. This is especially true when you are in heavy debt.

For example, let’s say you owe $ 100,000 at 4% interest and have 10 years to pay it off. Your monthly payment is $ 1,012 and you will pay a total of $ 1,494 in interest over the life of your loan. If you lowered the interest rate to 3.75%, your payments would decrease slightly to $ 1,001, but you would save a total of $ 1,421 in interest. Every little bit helps.

Keep in mind that auto payment can backfire if you’re not careful. Your student loan payment will be debited from your specified bank account regardless of whether you have sufficient funds, warns Rebecca Safier, certified student loan advisor and debt expert at Student Loan Hero. So if you run out of funds, you could end up overdrafting and paying a hefty fee.

“If you’re concerned about not having enough money in your bank account each month to cover your living expenses, auto-payment may not be your best choice,” says Safier, adding that you might be having trouble keeping your student loan bill going It is worth looking for ways to cut or suspend payments, such as requesting an income-based repayment, deferral, or deferral.

If you’ve previously signed up for automatic payment, but later discover that it is not suitable for you, turn it off as soon as possible and see when to revert to manual payments. Tayne noted that it often takes 5 to 10 business days for loan service providers to turn off auto payment. You can therefore try to withdraw the payment from the old account if you do not make the change early enough in advance of your payment date.

What if I was signed into Autopay prior to the Pandemic Forbearance?

Don’t assume that your student loan payments will resume with automatic payment when the emergency leave ends.

Even if you were previously set up for Autopay, if you signed up before March 13, 2020, you will need to sign in to your service provider’s website and sign in again. Updating your Autopay settings shouldn’t change when your payments resume, but it’s always smart to double-check, says Betsy Mayotte, the president and founder of the Institute of Student Loan Advisors (TISLA).

Also, keep in mind that your student loan service provider may have changed recently. FedLoan, Navient and Granite State Management & Resources are all leaving the credit services space and moving to new systems. So if your loans have been serviced by one of these organizations, you will need to register with your new servicer for automatic payment.

“In this case, it is especially important to review your loans and make sure that the student loan payments are set up correctly because the new loan service provider may not have your information or payment preferences,” says Safier. You can log into your Bundesstudienhilfe dashboard to find out who your loan service provider is.

While you’re at it, double-check your payment date so you won’t be surprised (or underfunded) if your student loan payment is withdrawn in May. Mayotte says you should see your due date by logging into your student loan account. Note that this information may not be published in your account until the end of the break. Mayotte anticipates it will be the same day of the month as it was before the COVID-19 liberation, but it’s always a good idea to double-check. And if you need to change the due date, in most cases you can do so by calling your servicer.

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