Student loans generally begin showing up in your mailbox before you even graduate from high school. It might seem like it’s a blessing that you are receiving so many offers to help towards your higher education. This may seem great, but there are still many things you must know in order to not put yourself into too much future debt.
Don’t panic if you can’t make a payment due to job loss or another unfortunate event. Usually, many lenders let you postpone payments if you are able to prove hardship. Just be aware that doing so may cause interest rates to rise.
Never panic when you hit a bump in the road when repaying loans. Life problems such as unemployment and health complications are bound to happen. Keep in mind that forbearance and deferment options do exist with most loans. Just know that the interest will build up in some options, so try to at least make an interest only payment to get things under control.
If you’re considering repaying any student loan ahead of time, focus on those with the largest interest. If you think you will be better off paying the one with the highest monthly payments first, you may be wrong. Best to look at the interest rates.
Know how long you have between graduation and the commencement of loan payments. For Stafford loans, you should have six months. Others, like the Perkins Loan, allot you nine months. Other loans will vary. Know exactly the date you have to start making payments, and never be late.
Student Loans
Go with the payment plan that best fits what you need. Most student loans have a ten year plan for repayment. You may be able to work a different plan, depending on your circumstances. For instance, you could be given more time but have to pay more interest. Consider how much money you will be making at your new job and go from there. A lot of student loans will be forgiven after you’ve let twenty five years go by.
Pay off the largest loan to reduce the total principal. That means you will generally end up paying less interest. Concentrate on repaying these loans before the others. Once a large loan has been paid off, transfer the payments to your next large one. When you make minimum payments against all your loans and pay as much as possible on the largest one, you can eventually eliminate all your student debt.
For those on a budget already stretched to the max, the idea of a student loan can be scary. Loan rewards programs can help a little with this, however. For example, you can look at SmarterBucks or LoanLink programs from Upromise. How much you spend determines how much extra will go towards your loan.
Get the maximum bang for the buck on your student loans by taking as many credits each semester as you can. While 9 to 12 hours each semester is full time, you may be able to get 15 to 18 which can help you to graduate faster. This will assist you minimizing your loan amounts.
Many people get student loans without reading the fine print. Ask questions so that you are completely aware. This is an easy way for a lender to get more money than they are supposed to.
Your student loan application must be filled out correctly in order to be processed as soon as possible. If you make any errors on the paperwork, this can cause a hold up in your getting the loan, which could cause you to be unable to pay for school when the semester starts.
If you don’t have very good credit and need a student loan, chances are that you’ll need a co-signer. Staying on top of your payments is essential. 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.
Taking out a PLUS loan is something that a graduate student can apply for. Their interest rate does not exceed 8.5%. While this is generally higher than either Perkins or Stafford loans, it still has lower interest rates than the typical personal loan. These loans are much better suited to an older student that is at graduate school or is close to graduating.
Take extra care with private loans. It can be difficult to figure out what the terms are exactly. You may only find out after signing the document. At this point, it may be very difficult to extricate yourself. Obtain as much information with regard to the terms as possible. If a good offer comes your way, ask other loan providers if they can match or beat it.
Find out what choices you have when it comes to repayment. If you believe finances will be tight after graduation, try to get a graduated repayment plan. This will make the first few payments very small, increasing over time.
Completely understand the payback terms of any loan. A grace period is offered in some loans, others offer a forbearance, and other circumstances may dictate other options. You should know your options. Before putting your signature on the loan agreement, it is wise to understand all the details.
Look into all the different options you have open to you as it pertains to making payments on your loans when they come due. If you want to keep your credit score protected, you need to make all payments on time, or you could have trouble with wage garnishment. If multiple payments are too difficult, consolidating your student loans can help.
The decisions you make about student loans are among your most important college decisions. A substantial loan with a high interest rate can end up being a huge problem. Keep in mind all that you read here as you prepare for both college and the future.
This is a limited-time offer. We are not able to guarantee availability if you wait!
