Most high school students begin getting student loan information long before needed. It may seem great to have this opportunity. However, There are things you must consider before deciding to take on such debt.
Know what kind of grace periods your loans offer. This is important for avoiding penalties that may result. Knowing when this is over will allow you to know when to pay your payments on time so you don’t have a bunch of penalties to take care of.
Know all of your loan’s details. You should always know how much you owe and to whom. Additionally, you should be aware of your repayment obligations. These details will significantly influence the repayment options available to you, as well as the loan forgiveness terms you will face. This is must-have information if you are to budget wisely.
Stay in communication with all lenders. Make sure you update them with your personal information if it changes. Anytime you receive a phone call, email or paper letter from your lender, pay attention to it as soon as it is received. Follow through on it immediately. Failing to miss any deadlines or regulations can mean risking losing quite a bit of money or time.
Don’t panic if you cannot make your payments on your student loans. Emergencies are something that will happen to everyone. Do be aware of your deferment and forbearance options. Just be mindful that interest continues to accrue in many options, so at least consider making interest only payments to keep balances from rising.
Pay off all your student loans using two steps. First, ensure you meet the minimum monthly payments on each separate loan. The second step is applying any extra money you have to your highest-interest-rate loan and not the one with the biggest balance. This will cut down on your liability over the long term.
Grace Period
How long is your grace period between graduation and having to start paying back your loan? Six months is usually the length for Stafford loans. For Perkins loans, the grace period is nine months. Other loans vary. Make certain you are aware of when your grace periods are over so that you are never late.
Get a payment option that works for you. Lots of student loans offer ten-year repayment plans. There are many other options if you need a different solution. The longer you wait, the more interest you will pay. Also, paying a percent of your wages, once you start making money, may be something you can do. Some student loan balances are forgiven after twenty five years has passed.
Anyone on a strict budget who is facing the repayment of a student loan is put in a difficult situation. Rewards programs can help. Look at programs like SmarterBucks and LoanLink via Upromise. These are similar to programs that give cash back. When you spend, you get rewards that you can use on loans.
To help maximize the money you get from student loans, sign up for additional credit hours. Though full-time student status requires 9-12 hours only, if you are able to take 15 or more, you will be able to finish your program faster. This will keep your loans to a minimum.
The simplest loans to obtain are the Stafford and Perkins. Many students decide to go with one or both of them. They are a great deal because you will get the government to pay your interest during your education. There’s a five percent interest rate on Perkins loans. On the subsidized Stafford loan, it’s fixed at no higher than 6.8%.
One form of loan that may be helpful to grad students is the PLUS loan. Their interest rate does not exceed 8.5%. This costs more than Perkins or Stafford loans, but it will be a better rate than a private loan. Because of this, you should get this option only if you’re an established and mature student.
Certain Lenders
Keep in mind that a college may have its reasons for pointing your toward certain lenders for loans. Some lenders use the school’s name. This may be deceiving. The school might get a payment or reward if a student signs with certain lenders. Therefore, don’t blindly put your trust in anything; do your own research.
When it comes to private student loans, exercise extreme care. Understanding every bit of these loans is difficult. Frequently, you are not aware of them until after executing the loan. This makes it hard to learn about your options. Try to get every bit of information you can obtain. If you get a great offer, check with other lenders to see if they will meet or beat it.
The decisions you make about student loans are among your most important college decisions. You may wind up with a huge problem after school because you are faced with the possibility of paying back a big loan with an even bigger interest rate. So, remember what you have learned from above as you head off to college and start your future.
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