Many people think they cannot afford a college education. Yes, it is true that school, especially the really good ones, costs can cost hundreds of thousands of dollars, but you can attend one of those schools if you can get a student loan. Read this article to learn all about them.
Keep in mind that there’s a grace period to follow before it’s time to pay a loan back. Typically this is the case between when you graduate and a loan payment start date. Staying aware of when this period ends is the right way to make sure you never have late payments.
Know the specifics about your loan. You need to stay on top of your balances, your lenders and the repayment status in which you find yourself at any given time. These are details that play an important role in your ultimate success. This is must-have information if you are to budget wisely.
Maintain contact with your 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. You should take all actions immediately. If you don’t do this, then it can cost you in the end.
Student Loans
Keep in mind that private financing is an option to help pay for school. Public student loans are highly sought after. Not as many students opt for private student loans and money stays unclaimed because not too many people are aware of them. Ask locally to see if such loans are available.
Use a two-step process to pay off your student loans. Make sure you pay the minimum amount due each month. Next, pay as much as you can into the balance on the loan which has the greatest interest rate. This will reduce your spending in the future.
Keep in mind the time that’s allotted to you as your grace period from when you get out of school until you have to start paying back the loan. Stafford loans offer six months of grace period. Perkins loans give you nine months. Other kinds of loans may have other grace periods. Make sure you know how long those grace periods are, and never pay late.
Student Loans
Choose the right payment option for you. Many student loans will offer a 10 year repayment plan. Other options may also be available if that doesn’t work out. For instance, you might secure a longer repayment term, but you will end up paying more in interest. Some student loans will base your payment on your income when you begin your career after college. Some loans’ balances get forgiven after 25 years.
If you have more than one student loan, pay each off according to interest rates. The loan with the individual highest rate needs paid down fastest and first. Using any extra cash available can help pay off student loans faster. You don’t risk penalty by paying the loans back faster.
Stafford and Perkins are the best loan options. These have some of the lowest interest rates. They are a great deal because you will get the government to pay your interest during your education. The Perkins tends to run around 5%. The Stafford loan only has a rate of 6.8 percent.
PLUS loans are a type of loan that is available only to parents and graduate students. Their interest rate doesn’t exceed 8.5%. These loans give you a better bang for your buck. This makes it a great choice for more established students.
Remember your school could have some motivation for recommending certain lenders to you. For example, there are schools that allow the use of their name by select private lenders. This can be misleading. Sometimes a school will have worked out a financial deal with a lender if you choose to use them. Make sure you grasp the subtleties of any loan prior to accepting it.
Federal Government
Wipe away the thoughts about not paying back your student loans and thinking the problem will just go away. There are many tools in the federal government’s arsenal for getting the funds back from you. The federal government can take your Social Security payments or take your tax refunds if money is owed. It is also possible for the government to garnish 15 percent of all disposable income. You could end up worse off in some circumstances.
If possible, maintain a job while you are attending school. By doing so you will not be relying solely on a loan and will also be able to earn some spending money.
Make sure you understand repayment terms. You may qualify for a deferment or forbearance, depending upon your situation. You must know what the options and expectations are from the lender. Before signing anything, find out more about it.
Student Loans
College is expensive. Therefore, student loans are often necessary to get a good education. The information above will help you make the best decisions when it comes to student loans. Remember these suggestions when you are ready to obtain a student loan.
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