A great education is key to your success. It is unfortunate that college and university tuition is so expensive that fewer and fewer people are able to attend. If the cost of a decent education is a matter of concern for you, read on to learn some valuable information about student loans. Read on so you can understand how to qualify for a loan and go to school!
Stay in touch with your lending institution. Always update them anytime your address, email or phone number changes, which can happen a lot during college. Also, be sure you immediately read any kind of mail you get from a lender, whether it’s electronic or paper. Take any requested actions as soon as you can. You can end up spending more money than necessary if you miss anything.
Don’t panic if you can’t make a payment due to job loss or another unfortunate event. A lot of the time a lender will allow a payment to be postponed if you show them you’re having a hard time. Just remember that doing this may raise interest rates.
Grace Period
How long is your grace period between graduation and having to start paying back your loan? For Stafford loans, it should give you about six months. Perkins loans have a nine month grace period. Other types can vary. Be sure you know exactly when you will be expected to begin paying, and don’t be late!
Make certain that the payment plan will work well for you. Many loans offer a ten year payment plan. There are other ways to go if this is not right for you. It is sometimes possible to extend the payment period at a higher interest rate. You might also be able to pay a percentage of your income once you begin making money. After 20 years or so, some balances are forgiven.
Interest Rates
When you begin to pay off student loans, you should pay them off based on their interest rates. Pay loans with higher interest rates off first. Apply any extra dollars you have to pay off student loan balances faster. There are no penalties for paying off a loan more quickly than warranted by the lender.
Making monthly payments is often difficult for those whose budget is tight. Loan programs with built in rewards will help ease this process. Look at programs like SmarterBucks and LoanLink via Upromise. These are essentially programs that give you cash back and applies money to your loan balance.
Take the maximum number of credit hours you can in your schedule to maximize the use of your loans. As much as 12 hours during any given semester is considered full time, but if you can push beyond that and take more, you’ll have a chance to graduate even more quickly. This helps reduce the total of loans.
Sign Anything
Never sign anything without knowing what exactly it says and means. If something is unclear, get clarification before you sign anything. This is one way that lenders use to get more than they should.
The Perkins and Stafford loans are the most helpful federal loans. These two are considered the safest and most affordable. With these, the interest is covered by the federal government until you graduate. A typical interest rate on Perkins loans is 5 percent. The interest rate on Stafford loans that are subsidized are generally no higher than 6.8 percent.
Why would your school recommend a certain lender to you? Schools sometimes allow lenders to refer to the name of the school. This is really quite misleading. The school might get a payment or reward if a student signs with certain lenders. Therefore, don’t blindly put your trust in anything; do your own research.
Know what the options for repayment are. If you think you’ll struggle to afford school after graduating, try applying for graduated payments. Your starting payments are small and will increase as your salary and security increases.
Add to the money you get from a student loan by looking for an on-campus job. This can offset your expenses somewhat and also give you some spending money.
If you can’t pay your bill, call the lender. You will find they are likely willing to work together with you so you can stay current. You might qualify for reduced payments or a deferral.
Communicate with all of your lenders both during college and after you graduate. Make sure to let them know anytime your address or other information changes. This will help your lender to give you accurate information. Also note that you are obligated to inform them of the date of your graduation or if you change schools or withdraw completely.
Explore all options when it comes to making prompt student loan payments. If you want to keep your credit score protected, you need to make all payments on time, or you could have trouble with wage garnishment. If you have several student loans, consider a loan consolidation.
To get a really good bang for your student loan buck, a great idea is to take classes online, rather than at the school itself. These courses allow you to add additional hours to your class load and can be completed around your schedule. Maximize your hours in each semester.
Many people want to go to school, but it can be expensive. You have no need to worry about school costs anymore now that you know you can get your desired education using student loans. Remember these tips when applying for them.
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