Student Loan Advice That Will Work For You

Some people have to get a student loan to get the education they desire. Many people don’t want to do this. Fortunately, this piece is full of key facts.

Know how long of a grace period is in effect before you must begin to make payments on the loan. This is important for avoiding penalties that may result. Having this information will help you avoid late payments and penalties.

If you lose your job, face financial issues or some other bump in the road comes up, don’t worry about missing a payment. Typically, most lenders will allow you to postpone your payments if you can prove you are having hardships. Your interest may increase if you do this.

You don’t need to panic if a problem arises during repayment of your loans. You will most likely run into an unexpected problem such as unemployment or hospital bills. There are options that you have in these situations. Just be mindful that interest continues to accrue in many options, so at least consider making interest only payments to keep balances from rising.

If you’re considering repaying any student loan ahead of time, focus on those with the largest interest. If your payment is based on what loans are the highest or lowest, there’s a chance you’ll be owing more at the end.

Grace Period

Pay attention to how long the grace period is after your graduation before you student loan has to be repaid. Many loans, like the Stafford Loan, give you half a year. Perkins loans offer a nine month grace period. Different loans will be different. This is important to avoid late penalties on loans.

Which payment option is your best bet? A lot of student loans let you pay them off over a ten year period. If this doesn’t work for you, you may have other options. For instance, you could be given more time but have to pay more interest. Additionally, some loans offer a slightly different payment plan that allows you to pay a certain percent of your income towards your debt. Some student loans offer loan forgiveness after a period of 25 years has elapsed.

Pay off the largest loan to reduce the total principal. That means you will generally end up paying less interest. Stay focused on paying the bigger loans first. Once you pay off one big loan, transfer the payments amounts to the loans with the next highest balances. By making sure you make a minimum payment on your loans, you’ll be able to slowly get rid of the debt you owe to the student loan company.

If you don’t have a lot of “extra” money, student loans can really make life difficult for you. A rewards program may help things. For examples of these rewards programs, look into SmarterBucks and LoanLink from Upromise. These give you rewards that you can apply toward your loan, so it’s like a cash back program.

Take the maximum number of credit hours you can in your schedule to maximize the use of your loans. Full-time status is usually 9-12 hours per semester, so getting between 15 and 18 can help you graduate sooner. This helps you reduce the amount you need to borrow.

Be sure to read and understand the terms of any student loans you are considering. Always ask any questions that come up or if you need anything clarified. Lenders sometimes prey on borrowers who don’t know what they are doing.

Perkins Loans

Stafford and Perkins loans are two of the best that you can get. They are cheap and safe. They are favorable due to the fact that your interest is paid by the government while you are actually in school. There’s a five percent interest rate on Perkins loans. The Stafford loans are a bit higher but, no greater than 7%.

Some schools have reasons that they may try to motivate you to go toward one particular lender to get a student loan. There are institutions that actually allow the use of their name by specific lenders. This may not be in your best interest. The school might be getting a kickback from the lender. Make sure you are aware of all the loan’s details before you decide to accept it.

As you can see, many people get student loans to finance their education. Now that you’ve read this article, you’re aware of what makes a good student loan and what doesn’t. This advice will help you find the loans you need.