Attending college nowadays can be exorbitantly expensive. This is true of even average universities. What do you do when you need money to attend school but don’t have it? You may find that a loan is your only course of action. The advice that follows will help you when it comes to apply for and repaying a student loan.
Do know that you are probably going to have a post-graduation grace period from your student loans before you are required to start making payments back. This is typically a six to nine month period after your graduation before repayments start. Having this knowledge of when your payments are scheduled to begin will avoid incurring any penalties.
You don’t need to worry if you cannot pay for your student loans because you are unemployed. Typically, most lenders will allow you to postpone your payments if you can prove you are having hardships. Just know that the interest rates may rise.
Do not overlook private sources of funds for college. There is quite a demand for public student loans even if they are widely available. A private student loan has less competition due to many people being unaware that they exist. Look at these loans at a local college since they can cover one semester worth of books.
Focus on paying off student loans with high interest rates. If you pay off the wrong loans first, you could end up paying more than you need to.
Grace Period
Be mindful of the exact length of your grace period between graduation and having to start loan repayments. If you have Stafford loans, you will usually have about 6 months. For Perkins loans, you’ll have a nine month grace period. Other types of loans may vary. Do you know how long you have?
Figure out what will work best for your situation. In the majority of cases, student loans offer a 10 year repayment term. Other options are likely to be open to you if this option does not suit your needs. For instance, you can stretch the payment period over a longer period of time, but you will be charged higher interest. Consider how much money you will be making at your new job and go from there. Sometimes you may get loan forgiveness after a period of time, often 25 years.
Pay off big loans with higher interest rates first. The less principal that is owed, the less you’ll have to pay in interest. Hone in on large loans. After you have paid off the largest loan, begin paying larger payments to the second largest debt. Make minimal payments on all your loans and apply extra money to the loan with the greatest interest in order to pay off all your loans efficiently.
Never sign anything without knowing what exactly it says and means. It’s a good idea to speak with the lender to ask about thing you don’t know too much about. This is an easy way for a lender to get more money than they are supposed to.
Perkins Loan
Two of the most popular school loans are the Perkins loan and the often mentioned Stafford loan. These are very affordable and are safe to get. They are great because while you are in school, your interest is paid by the government. The Perkins loan has an interest rate of five percent. The Stafford loan only has a rate of 6.8 percent.
Keep in mind that your school could have other motivations when they recommend certain lenders. Schools sometimes allow lenders to refer to the name of the school. This can mislead you sometimes. The school might actually get a commission for your loan. Know what the loan terms are before signing on the dotted line.
Get rid of thinking that defaulting on a loan means freedom. The government has several collection tools at its disposal. For instance, it has the power to seize tax refunds as well as Social Security payments. They can also take money out of your paycheck. Generally speaking, you will be far worse off.
Don’t rely solely on student loans for financing your college experience. Save money wherever possible and look into scholarships you might qualify for. There are websites that will help match you to scholarships and locate grants. Start looking early so that you’ll find the best information and assistance.
Be sure to double check all forms that you fill out. Accurately filling out this form will help ensure you get everything you are qualified to get. If you have doubts about any of the information, consult a financial aid rep.
A great way to stretch out your student loan money is by getting a meal plan, rather than one where you pay for each individual meal. This way you won’t get charged extra and will only pay one fee per meal.
Explore the different ways you can repay your loans. If you think monthly payments are going to be a problem after you graduate, then sign up for payments that are graduated. Using them, your beginning payments are smaller. Gradually though, they will go up as your earnings expectations increase.
Make certain you understand your terms of repayment. Some loans offer grace periods, forbearance options and other financial choices that depend on your circumstances. You need to know what your options are and what the lender expects of you. Before you enter into any loan contracts, find out about these things.
If unable to keep up with payments, let the lender know right away. These institutions are more likely to accommodate your needs if you seek their help right away. Perhaps you can get a deferral or lowered payments.
Now that you have perused the above information, you surely see that student loans are indeed attainable. The information from this article will help ensure you can get the money you need to pay for your college education. Use this information wisely when it’s time to fill out your student loan application.
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