You can get student loan offers even before graduating high school. You might think this is a terrific thing. There are things you have to consider first before going into debt, so read on for great suggestions.
Stay in communication with all lenders. Always let them know when you change your phone number, mailing address or email address, and these things can happen often when you are in college. It is also important to open and thoroughly read any correspondence you receive from your lender, whether it is through traditional or electronic mail. Do whatever you must as quickly as you can. If you miss something, it may cost you.
Use a two-step process to pay off your student loans. Start by making the minimum payments of each loan. Second you should pay whatever you’re making extra to a loan that has a high interest rate, not the one with a higher balance. This will keep your total expenditures to a minimum.
If you are considering paying off a student loan early, start with the loans with high interest rates. You definitely want to pay down the ones with the highest interest rate, because taking care of the lower ones could cause you to end up paying more money.
Identify and specifically choose payment options that are suited to your personal circumstances. Many loans allow for a 10 year payment plan. You may be able to work a different plan, depending on your circumstances. You might be able to extend the plan with a greater interest rate. You might even only have to pay a certain percentage of what you earn once you finally do start making money. Sometimes you may get loan forgiveness after a period of time, often 25 years.
Choose payment options that best serve you. Many student loans offer 10 year payment plans. If this doesn’t work for you, you might have another option. For instance, you can possibly spread your payments over a longer period of time, but you will have higher interest. It may even be possible to pay based on an exact percentage of your total income. After 20 years or so, some balances are forgiven.
The prospect of monthly student loan payments can be somewhat daunting for someone on an already tight budget. A rewards program may help things. For instance, look into SmarterBucks and LoanLink, products of Upromise. These give you rewards that you can apply toward your loan, so it’s like a cash back program.
It is easy to simply sign for a student loan without paying attention to the fine print. You must, however, ask questions so that you know what is going on. Otherwise, you could have much more debt than you were counting on.
Fill your application out accurately to get your loan as soon as possible. If you make a mistake, it will take longer to go through. You may not see any money for an entire semester.
If your credit isn’t the best, and you want to apply for private student loans, then you will probably need a co-signer. You have to make every single payment. If you miss a payment, then your co-signer will not be happy because they are just as responsible for these payments as you are.
There is a loan that is specifically for graduate students or their parents known as PLUS loans. The interest rate is no greater than 8.5%. This costs more than Perkins or Stafford loans, but it will be a better rate than a private loan. This means that this is a suitable choice for students who are a bit older and better established.
Remember your school could have some motivation for recommending certain lenders to you. Some schools let private lenders use their name. This is frequently not the best deal. The school might be getting a kickback from the lender. Be sure you understand all the ins and outs of a loan before accepting it.
Defaulting on a loan is not freedom from repaying it. The federal government will go after that money in many ways. For example, the government can take a cut from your Social Security payments or your tax return. It is also possible for the government to garnish 15 percent of all disposable income. This will leave you worse off.
When you’re trying to fill out a financial aid application, be sure that you’re not making any errors on it. It can really affect what you’ll be offered if you file in error. If you are unsure of anything in your application, talk with a financial aid counselor at your school.
Starting college means making important decisions, but none are quite as important as thinking about the debt you are about to take on. If you borrow a lot of money at a high rate of interest, you will have a debt burden for a long time. So, remember what you have learned from above as you head off to college and start your future.
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