You will likely encounter getting a student loan during your lifetime. It could be today, it could be down the road. No matter when it may happen, you should learn everything you can as it pertains to getting a student loan to suit your needs. These tips will give you what you need to know.
Don’t panic if you have a slight hiccup when paying back your loans. Job losses and health emergencies are part of life. Keep in mind that forbearance and deferment options do exist with most loans. Just remember that interest is always growing, so making interest-only payments will at least keep your balance from rising higher.
If you plan to prepay your loans, try to pay those with the highest interest rates first. Calculating the terms properly will prevent spending more money than is necessary by the end of the loan.
Grace Period
How long is your grace period between graduation and having to start paying back your loan? Stafford loans offer a period of six months. A Perkins loan gives you a nine month grace period. The time periods for other student loans vary as well. Know when you are expected to pay them back, and make your payments on time!
Choose a payment plan that you will be able to pay off. Most student loan companies allow the borrower ten years to pay them back. If this is not ideal for you, look into other possibilities. Understand if you choose a longer repayment period you will end up having to pay more in interest. You might be eligible to pay a certain percentage of income when you make money. It may be the case that your loan is forgiven after a certain amount of time, as well.
Pick a payment plan that works best for you. Most loans have a 10-year repayment plan. If this isn’t right for you, you may be eligible for different options. Examples include lengthening the time it takes to repay the loan, but having a higher interest rate. You may negotiate to pay just a set percentage of the money you begin to earn. On occasion, some lenders will forgive loans that have gone unpaid for decades.
Fill out each application completely and accurately for faster processing. If you give wrong or incomplete information, it can slow down processing and you may not be able to start when you planned. This can put you behind by a year.
Perkins Loans
Stafford and Perkins loans are the most advantageous federal loans to get. Many students decide to go with one or both of them. These are great options because the government handles your interest while you are in school. Perkins loans have a rate of 5 percent interest. The subsidized Stafford loan has an interest rate that does not exceed 6.8%.
When applying for private loans without good credit, you will need a cosigner. It is critical that you make all your payments in a timely manner. If you can’t pay, your co-signer will also be liable.
Keep in mind that the school you attend could have a hidden agenda when it comes to them recommending you to a lender. Schools sometimes let private lenders use the name of the school. This is generally misleading. Schools may actually receive money from the lender of you end up taking out a loan. It is important that you understand the entire loan contract before agreeing to it.
Be careful with private loans. Many times, it is difficult to ascertain exactly what the terms are. It may be that you are unaware of them until it is too late. Then, it will be very hard to free yourself from them. Gather as much facts and information as you are able to. If a lender gives you a good offer, see if another lender will match it or do even do better.
Student Loans
In summary, although you may not need a student loan now, you might need one in the future. Understanding the “ins and outs” of student loans will help you get the best deal for yourself. The above information has offered many tips to get you on your way to applying for student loans.
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