Since college costs only continue to rise, student loans are nearly a universal part of student life. It’s possible to get the proper loan, as long as you know what to look for. Read this article to learn more.
Make it a point to be aware of all the important facets of your student loans. 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. You need this information to budget yourself appropriately.
Never fear paying your student loans if you are unemployed or another emergency happens. A lot of times, if you can provide proof of financial hardship, lenders will let you to delay your payments. Just know that taking advantage of this option often entails a hike in your interest rates.
If you’re having trouble repaying loans, don’t panic. Unemployment or a health problem can happen to you from time to time. 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.
Grace Period
Be mindful of the exact length of your grace period between graduation and having to start loan repayments. Stafford loans offer six months of grace period. Perkins loans often give you nine months. Other types of student loans can vary. Do you know how long you have?
Figure out what will work best for your situation. The ten year repayment plan for student loans is most common. If this won’t work for you, there may be other options available. The longer you wait, the more interest you will pay. It may also be possible for you to dedicate a portion of your salary to loan repayment once you have a regular paycheck coming in. Sometimes, they are written off after many years.
Prioritize your loan repayment schedule by interest rate. Pay loans with higher interest rates off first. Anytime you have extra cash, apply it toward your student loans. Remember, there are no penalties for paying off your loan early.
The concept of making payments on student loans each month can be frightening when money is tight. You can make things a bit easier with help from loan rewards programs. Look at the SmarterBucks and LoanLink programs that can help you. These are similar to cash back programs so that means you can get rewards that help you with your loan situation.
Squeeze in as many possible credit hours as you can to maximize your student loans. You will graduate more quickly if you get to 15 or 18 hours each semester rather than 9 or 12. This helps you reduce the amount you need to borrow.
A lot of people apply for a student loan and sign things without having knowledge of what they’re doing. Ask questions so you can clear up any concerns you have. It is simple to receive more cash than they were meant to.
Perkins Loan
The Perkins loan and the Stafford loan are the most desirable federal programs. These two are considered the safest and most affordable. It ends up being a very good deal, because the federal government ends up paying the interest while you attend school. The interest rate on a Perkins loan is 5 percent. Subsidized Stafford loans have a fixed rate of no more than 6.8 percent.
Bad credit will mean you need a cosigner on a private loan. Once you have the loan, it’s vital that you make all your payments on time. Otherwise, the co-signer will also be on the hook for your loans.
If you are in graduate school, a PLUS loan may be an option. The interest rates on these are kept reasonable. This is a bit higher than Perkins and Stafford loan, but less than privatized loans. That is why it’s a good choice for more established and prepared students.
Many people spend a lot of money while they are in college, accumulating large debt. This is why it’s important to know about loans so they don’t negatively affect you later on. Luckily, this information will keep you from falling into common traps.
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