Student loans can be the key to getting the college degree that you dream of, but they can also become a nightmare if you don’t borrow wisely. So it’s a good idea to get smart and learn about student loans before signing anything. Read on for important information you ought to know prior to getting a loan.
Always figure out what the details of the loans you have out are. You want to keep track of your balance, who your lender is and any current repayment status of your loans. These are three very important factors. To devise a good budget, you must factor all this in.
Stay in contact with your lender. Tell them when anything changes, such as your phone number or address. Read all letters which you are sent and emails, too. Take the actions you need to take as quickly as you can. If you miss something, that can mean a smaller loan.
Attend to your private college financing in a timely manner. There are plenty of public student loans to be had, but the competition to get them is fierce. A private student loan has less competition due to many people being unaware that they exist. Find out whether there are any agencies in your area that have loans that can cover the cost of school books or other small needs that you must have covered.
There are two main steps to paying off student loans. First, be sure to pay the monthly amount due on each loan you have taken out. Second, if you have any extra money, use it to make extra payments on the loan that bears the higher interest rate rather than the one that bears the highest balance. This will cut back on the amount of total interest you wind up paying.
Grace Period
Be aware of the amount of time alloted as a grace period between the time you complete your education and the time you must begin to pay back your loans. For Stafford loans, it should give you about six months. A Perkins loan gives you a nine month grace period. Other types of student loans can vary. Understand when your first payments will be due so that you can get on a schedule.
Get a payment option that works for you. Many loans allow for a 10 year payment plan. There are other choices available if this is not preferable for you. For example, you might have to take a while to pay a loan back, but that will make your interest rates go up. Also, paying a percent of your wages, once you start making money, may be something you can do. Some balances pertaining to student loans get forgiven about 25 years later.
Look to pay off loans based on their scheduled interest rate. Go after high interest rates before anything else. Using any extra cash available can help pay off student loans faster. There is no penalty for paying off your loans early.
One form of loan that may be helpful to grad students is the PLUS loan. Their interest rate doesn’t exceed 8.5%. While this is generally higher than either Perkins or Stafford loans, it still has lower interest rates than the typical personal loan. This means that this is a suitable choice for students who are a bit older and better established.
Student Loans
Banish the notion that defaulting on your student loans means freedom from debt. There are various ways that your finances can suffer because of unpaid student loans. They can take your income taxes or Social Security. They can also take money out of your paycheck. Many times you will put yourself in an even worse situation.
When it comes to private student loans, exercise extreme care. Understanding every bit of these loans is difficult. In many cases, you won’t know until you’ve signed the contract. You may not be able to get out of the loan then. Learn about the loan up front. If you get a great offer, check with other lenders to see if they will meet or beat it.
Never depend solely on student loans for paying for college. Make sure you save money for your education and research grants and scholarships to help. There are a lot of great websites that help you with scholarships so you can get good grants and scholarships for yourself. Be sure you start to search soon so you’re able to qualify for the best deals.
Double check all applications for errors. This is crucial because any mistakes could affect how much aid you are offered. If you are concerned about possible errors, make an appointment with a financial aid counselor.
Student loans come with a lot of variables. The choices made now can affect your life for years to come. Smart borrowing is the way to go, and the tips in the above article should be remembered when you go to apply for a student loan.
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