You will get student loan offers in the mail sometimes before high school is what you’ve graduated from. Initially, these loan offers may seem like the answer. But prior to going into debt, it’s important to read these tips to help.
Know your loan details inside and out. You must pay close attention to how much you owe, what the terms are and the name of your lending institution. It will benefit you in getting your loans taken care of properly. It will help you budget accordingly.
Stay in touch with the lender. When you make changes to your address or phone number, make sure you let them know. Read all mail you get from lenders. Take whatever actions are necessary as soon as you can. Overlooking things can end up being very expensive.
Do not worry if you are unable to make a student loan payment because you lost your job or some other unfortunate circumstance has occurred. Lenders will typically provide payment postponements. Just remember that doing this may raise interest rates.
Never panic when you hit a bump in the road when repaying loans. You could lose a job or become ill. You may have the option of deferring your loan for a while. Interest continues to compound, however, so a good strategy is to make interest only payments that will prevent your balance from getting bigger.
If you are considering paying off a student loan early, start with the loans with high interest rates. If you solely base your repayment by which ones have a lower or higher balance, then you might actually end up paying back more in the end.
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. For Stafford loans, the period is six months. Perkins loans give you nine months. The amount you are allowed will vary between lenders. This is important to avoid late penalties on loans.
If you don’t have a lot of “extra” money, student loans can really make life difficult for you. A good loan rewards program can make it all more manageable. For instance, check out SmarterBucks and LoanLink, both of which are offered by Upromise. These are very similar to cash back programs, where any dollars you spend can accumulate rewards which apply to your student loan.
Get the maximum bang for the buck on your student loans by taking as many credits each semester as you can. You may be able to scrape by with 12 hours, but try to at least carry 15 per semester. If possible, go for 18. This helps reduce the total of loans.
Interest Rates
The simplest loans to obtain are the Stafford and Perkins. These have some of the lowest interest rates. The are idea, because the government shoulders the interest payments while you remain in school. The Perkins loan has an interest rate of five percent. Subsidized Stafford loans offer interest rates no higher than 6.8 percent.
Applying for a private loan with substandard credit is often going to require a co-signer. Make sure that your payments are up to date. If you don’t keep up with payments on time, your co-signer will be responsible, and that can be a big problem for you and them.
Banish the notion that defaulting on your student loans means freedom from debt. The government has a lot of ways it can try to get its money back. The federal government can garnish your taxes and disability payments. The government also has the right to claim 15 percent of all your income. You could end up worse off that you were before in some cases.
The decisions you make about student loans are among your most important college decisions. Borrowing a large sum of money at high interest rates can turn into a huge financial burden. So, keep in mind what you’ve gone over here while you get into college and being working on the future.
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