Student Loans: What Every Student Should Know

These days, it seems that not many people can finish their education without taking out at least some student loans. To avoid accumulating too much debt, you need to learn more about student loans before applying for any. Read below to get a good student loan education to will help prepare you to pay it back.

Stay in touch with the lender. Anytime there are changes to your personal information such as where you live, phone number, or email, it is important they are updated right away. Do not put off reading mail that arrives from the lender, either. You must act right away if information is required. Missing anything in your paperwork can cost you valuable money.

If you lose your job, face financial issues or some other bump in the road comes up, don’t worry about missing a payment. Many lenders will let you postpone payments if you have financial issues. However, you should know that doing this could cause your interest rates to increase.

Don’t panic if you aren’t able to make a loan payment. Life problems such as unemployment and health complications are bound to happen. There are options like forbearance and deferments for most loans. Still, remember that your interest will have to be paid back, so try and pay what you can, when you can.

Pay off all your student loans using two steps. First, always make minimum payments each month. The second step is applying any extra money you have to your highest-interest-rate loan and not the one with the biggest balance. In this way, the amount you pay as time passes will be kept at a minimum.

If you are in the position to pay down your student loans, make the high interest loans your first priority. Basing payments on the highest and lowest amounts can make you end up paying more money later.

When you graduate, know how much time you have before you have to start making payments on your loans. Stafford loans usually have one half year before the payments have to be made. For Perkins loans, you have nine months. For other loans, the terms vary. It is important to know the time limits to avoid being late.

When repaying student loan obligations, prioritize them by interest rate. The one carrying the highest APR should be dealt with first. Then utilize the extra cash to pay off the other loans. You don’t risk penalty by paying the loans back faster.

Anyone on a budget may struggle with a loan. Loan rewards programs soften the blow somewhat. Two such programs are SmarterBucks and LoanLink. 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. Generally, being a full-time student is seen as 9 to 12 hours per semester, but if you can squeeze in between 15 or 18, then you should be able to graduate sooner. This will help in reducing your loan significantly.

If you want your application for a student loan to be processed quickly, ensure that the forms are filled out completely and accurately. If you make a mistake, it will take longer to go through. You may not see any money for an entire semester.

Stafford Loans

The best loans that are federal would be the Perkins or the Stafford loans. They are the safest and most economical. These are good loans because the government pays the interest while you are still in school. There’s a five percent interest rate on Perkins loans. Subsidized Stafford loans have a fixed rate of no more than 6.8 percent.

A PLUS loan is specifically oriented to address the needs of graduate students and/or parents. The interest rate won’t be any larger than 8.5%. This is a bit higher than Perkins and Stafford loan, but less than privatized loans. This makes it a good option for established and mature students.

If you are furthering your education with a college degree, debt is sure to accumulate. Until the costs of a college education are reduced, almost everyone will need one. Since you have this information, you should feel better about getting a loan.