Student loans can make the college experience easier, but might also make a mess out of your life if entered into unwisely. Knowing everything you can find out concerning student loans is needed prior to signing for them. Continue on and get educated so you understand it all before taking on this debt.
Know that there’s likely a grace period built into having to pay back any loan. This is typically a six to nine month period after your graduation before repayments start. You can use this time to start saving up for some initial payments, getting you ready to avoid any penalties.
Pay your loan off in two steps. First, ensure you meet the minimum monthly payments on each separate loan. After this, you will want to pay anything additional to the loan with the highest interest. This will make things cheaper for you over time.
If you want to get any student loan paid ahead of time, it’s a good idea to pay off the ones with more interest. If you try to pay off the ones with the lowest balances first, you may pay more interest that you have to.
Grace Periods
Know how much time your grace period is between graduating and when you need to start paying back loans. For Stafford loans, you should have six months. If you have Perkins loans, you will have 9 months. Other kinds of loans may have other grace periods. Make sure you know how long those grace periods are, and never pay late.
Go with the payment plan that best suits your needs. Many student loans offer 10 year payment plans. If this isn’t possible, then look around for additional options. If you take a loan at a higher interest rate, for example, you can extend your time to pay. You may also have to pay back a percentage of the money you make when you get a job. The balances on student loans usually are forgiven once 25 years have elapsed.
Take the maximum number of credit hours you can in your schedule to maximize the use of your loans. While 9 to 12 hours each semester is full time, you may be able to get 15 to 18 which can help you to graduate faster. This helps you minimize the amount of your loans.
Make sure to understand everything about student loans before signing anything. Ask to get clarification on anything you don’t understand. A lender may wind up with more money that necessary if there is a term that you don’t understand.
Perkins Loan
The best federal loans are the Stafford loan and the Perkins loan. They are the safest and are also affordable. These are great options because the government handles your interest while you are in school. The interest rate on a Perkins loan is 5 percent. On subsidized Stafford loans it is fixed at a rate no greater than 6.8%.
If your credit isn’t the best and you are applying for a student loan, you will most likely need a co-signer. Make your payments on time. If you don’t, the person who co-signed is equally responsible for your debt.
Keep in mind that your school could have other motivations when they recommend certain lenders. There are institutions that actually allow the use of their name by specific lenders. This can be misleading. They may receive a type of payment if certain lenders are chosen. Understand every aspect of your loan right off the bat.
Use caution if you are considering getting a private student loan. It can prove difficult to find out what the exact terms are. You may find it difficult to navigate through it all until after you are already stuck. If there are terms you find unfavorable at this point, then it can be really hard to back out of the deal. Get as much information as you can. If a lender gives you a good offer, see if another lender will match it or do even do better.
It’s tempting to do it, but you should never make student loans the only path of paying for your schooling. Save your money up in advance and do not forget to apply for scholarships. You can find many places online that show you how to apply for grants and scholarships that will help you secure the money you need. Be sure to begin your search as soon as possible in order to be prepared.
There is a lot to keep in mind when looking for student loans. The choices you make now can have big implications on your life, even well after you graduate from school. Wise borrowing is the way to go, so use this advice when applying for student loans.
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