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. That is why you need to know all about student loans before getting one. Read this article to learn about what you should know before borrowing.
Find out what the grace period is you are offered before you are expected to repay your loan. This is the amount of time you have before the lender will ask that your payments need to start. Knowing this will give you a head start on getting your payments in on time and avoiding hefty penalties.
Private financing is one choice for paying for school. Public loans are great, but you might need more. Private loans – especially small ones – do not have as much competition, and this means that there is funding available that most other people don’t even know about. Research community resources for private loans that can help you pay for books and other college necessities.
If you are thinking about paying off any of your student loans ahead of schedule, you should focus on the ones that have the highest interest. If you get your payments made on the loans that have the lowest or the highest, it can cost you extra in the end.
Month Grace Period
Make sure you understand the true length of your grace period so that you do not miss payments. Stafford loans provide a six month grace period. For Perkins loans, you’ll have a nine month grace period. The amount you are allowed will vary between lenders. Know what you have to pay when, and pay on time!
Pick the payment option that works best for you. Many of these loans offer a ten year repayment period. If that isn’t feasible, there could be alternatives. For example, you might have to take a while to pay a loan back, but that will make your interest rates go up. The company may be willing to work with a portion of your net income. After 25 years, some loans are forgiven.
Pay off your biggest loan as soon as you can to reduce your total debt. You won’t have to pay as much interest if you lower the principal amount. It is a good idea to pay down the biggest loans first. Once you pay a big loan off, you can transfer the next payments to the ones that are next in line. When you make minimum payments against all your loans and pay as much as possible on the largest one, you can eventually eliminate all your student debt.
Having to make a monthly student loan payment is hard for a budget that is already stretched thin. There are loan rewards opportunities that can help. For instance, look into the Upromise programs called SmarterBucks and LoanLink. These work like cash back programs, and the money you spend earns rewards that can be applied toward your loan.
You can stretch your dollars further for your student loans if you make it a point to take the most credit hours as you can each semester. 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. In the grand course of time, you will end up taking out fewer loans.
Never sign anything without knowing what exactly it says and means. It is essential that you question anything you do not clearly understand. There are unscrupulous lenders who will take advantage of the unwary.
If you don’t have very good credit and need a student loan, chances are that you’ll need a co-signer. You should be sure to stay on top of your payments and never miss one. If you miss a payment, you will saddle your co-signer with the debt.
PLUS student loans are offered to parents and graduate students. They have an interest rate that is not more than 8.5 percent. While this is generally higher than either Perkins or Stafford loans, it still has lower interest rates than the typical personal loan. These loans are much better suited to an older student that is at graduate school or is close to graduating.
Your school may want you to borrow from certain lenders. Schools sometimes let private lenders use the name of the school. This is oftentimes quite misleading to students and parents. The school might be getting a kickback from the lender. Learn all you can about student loans before you take them.
You aren’t free from your debt if you default on your loans. There are several ways the government can get their money. Claiming part of your income tax return or your Social Security payments are only two examples. It is also possible for the government to garnish 15 percent of all disposable income. Usually, you will wind up being worse off than you were previously.
When you are filling out your financial aid application, make sure that you are positive there are no errors on it. This is important because it may affect the amount of the student loan you are offered. If you are unsure of anything in your application, talk with a financial aid counselor at your school.
Make sure the lender always has your updated contact information. It is essential to know the complete information about your loan and any stipulations involved in your repayment schedule. Also, you can get great advice from your lender.
If you owe a very large amount on a student loan, don’t let it control you with worry. The amount owed can seem very large, but remember you’re going to pay it back over an extended time period. If you keep working and saving cash, you can pay them off in full force.
There are many things you have to think about if you are getting a loan. The choices you make now can affect you far into the future. It’s best to borrow wisely, so be mindful of all that you learned from this article.
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