Even high school students will start receiving student loan offers for college. It may seem great to have this opportunity. But, you need to tread carefully as you explore student loan options.
Make sure you understand the fine print related to your student loans. You want to keep track of your balance, who your lender is and any current repayment status of your loans. It will benefit you in getting your loans taken care of properly. You have to have this information if you want to create a good budget.
Make sure you are in regular contact with the lender. Let them know if your number, email or address changes, all of which occur frequently during college years. Anytime you receive a phone call, email or paper letter from your lender, pay attention to it as soon as it is received. Take action right away. If you miss something, it may cost you.
Do not overlook private sources of funds for college. Though federal loans are common, competition in the market does exist. Private student loans reside in a different category. Often, some of the money is never claimed because students don’t know about it. Look at these loans at a local college since they can cover one semester worth of books.
Grace Period
How long is your grace period between graduation and having to start paying back your loan? If you have Stafford loans, you will usually have about 6 months. Perkins loans offer a nine-month grace period. For other loans, the terms vary. Make sure you know how long those grace periods are, and never pay late.
Pick a payment plan that works best for you. Many of these loans have 10-year repayment plans. You can consult other resources if this does not work for you. You may need to extend the time you have to repay the loan. This often comes with an increase in interest. Therefore, you should pay it once you make money. Certain student loan balances just get simply forgiven after a quarter century has gone by.
Pay off your loans in order of interest rates. Pay loans with higher interest rates off first. Do what you can to put extra money toward the loan so that you can get it paid off more quickly. You won’t have any trouble if you do your repayment faster.
Anyone on a strict budget who is facing the repayment of a student loan is put in a difficult situation. Loan rewards programs soften the blow somewhat. Look into something called SmarterBucks or LoanLink and see what you think. These are similar to cash back programs so that means you can get rewards that help you with your loan situation.
Take a large amount of credit hours to maximize your loan. 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 you shave off some of the cost of your loans.
PLUS student loans are offered to parents and graduate students. 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. These loans are much better suited to an older student that is at graduate school or is close to graduating.
There are many facets to college, and an important one is not accruing too much debt when financing your education. Choosing to borrow too much money, along with a higher interest rate can quickly add up to a big problem. So, it is important to remember the tips you learned here when you go to college and continue your education.
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