Student loans are an important part of getting a college degree. Educate yourself on the process before you make any firm commitments. The advice that follows is a good starting point.
Know what kind of grace periods your loans offer. Typically this is the case between when you graduate and a loan payment start date. When you know what it is, you will have time to make a payment plan that will help you pay on time without penalties.
Stay in contact with your lender. Keep them updated on any change of personal information. Read all mail you get from lenders. Follow through on it immediately. Missing an important piece of mail can end up costing a great deal of money.
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You are offered a grace period after you graduate before you must start paying on your student loans. For Stafford loans, the period is six months. Perkins loans offer a nine-month grace period. Other loans offer differing periods of time. Be sure you know exactly when you will be expected to begin paying, and don’t be late!
Figure out what will work best for your situation. The ten year repayment plan for student loans is most common. If these do not work for you, explore your other options. For instance, it may be possible to extend the loan’s term; however, that will result in a higher interest rate. After you begin to make money, you might be able to use a certain percentage of that income to help pay down the student loan. Some loans are forgiven in 25 years.
Monthly student loans can seen intimidating for people on tight budgets already. You can minimize the damage a little with loan reward programs. Upromise offers many great options. These are similar to cash back programs so that means you can get rewards that help you with your loan situation.
To get more from student loan money, try taking as many credits as you can. Full time is 9-12 hours, but you can go as high as 8. This helps you shave off some of the cost of your loans.
It is very important that you correctly fill out all student loan documents to ensure the timely process of them. Incorrect and incomplete information gums up the works and causes delays to your education.
A PLUS loan is specifically oriented to address the needs of graduate students and/or parents. They cap their interest rate at 8.5 percent. These rates are higher, but they are better than private loan rates. Because of this, you should get this option only if you’re an established and mature student.
Remember that your school may have its own motivations for recommending you borrow money from particular lenders. They may have a deal with a private lender and offer them use of the school’s name. This is frequently not the best deal. The school might actually get a commission for your loan. Make sure you are aware of all the loan’s details before you decide to accept it.
Get rid of the notion that by defaulting on a loan it will get you out of debt. Unfortunately if you do this, the federal government will use all means necessary to recover this debt. For instance, it may garnish part of your annual tax return. It is also possible for the government to garnish 15 percent of all disposable income. You will probably be worse off than before in some cases.
Heed caution when dealing with private loans. These have many terms that are subject to change. You may not know exactly what you’re signing until later. If you sign a contract without understanding the terms, you could be setting yourself up for heartache. Try to get every bit of information you can obtain. If you receive an offer that’s great, see if other lenders can beat or match it.
You can save money by purchasing a meal plan from the college cafeteria. The best way to do this is to pay for meals rather than a specific dollar amount. A plan that presumes you will eat every time food is served may overcharge you.
As you now know, there are many things you should consider about student loans. The decisions you make now will affect you long after graduation. By being sensible, you can find a great loan at an affordable rate.
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