Even high school students will start receiving student loan offers for college. It may seem great to have this opportunity. But before you incur all that debt, you must know some things.
Be sure you know all details of all loans. You need to watch what your balance is, who the lender you’re using is, and what the repayment status currently is with loans. These details are imperative to understand while paying back your loan. This information is necessary to plan your budget accordingly.
Stay in contact with your lender. Tell them when anything changes, such as your phone number or address. Also, make sure that you immediately open and read every piece of correspondence from your lender, both paper and electronic. If the correspondence requests you take an action, do so as soon as you can. Missing anything could make you owe a lot more money.
Student Loans
Implement a two-step system to repay the student loans. Begin by figuring out how much money you can pay off on these student loans. Second, you will want to pay a little extra on the loan that has the higher interest rate, and not just the largest 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. Do not simply pay off the loan that has the smallest amount remaining.
You are offered a grace period after you graduate before you must start paying on your student loans. Stafford loans offer loam recipients six months. If you have Perkins loans, you will have 9 months. Other types can vary. Know what you have to pay when, and pay on time!
The idea of paying off a student loan every month can seem daunting for a recent grad on a tight budget. That can be reduced with loan rewards programs. Look into something called SmarterBucks or LoanLink and see what you think. These work like cash back programs, and the money you spend earns rewards that can be applied toward your loan.
It is easy to simply sign for a student loan without paying attention to the fine print. Make certain that you understand all of the facts before signing the dotted line. This is one way a lender may collect more payments than they should.
Stafford and Perkins loans are the best federal student loan options. They are the safest and most economical. They are a great deal since the government pays your interest while you’re studying. The Perkins loan carries an interest rate of 5%. On Stafford loans that are subsidized, the loan will be fixed and no larger than 6.8%.
Look into PLUS loans for your graduate work. The interest rate won’t be any larger than 8.5%. While it may be more than other loans, it is cheaper than you will get through a private lender. For this reason, this is a good loan option for more mature and established students.
Get the idea out of your head that you will be forgiven for a student loan that you have defaulted on. There are many tools in the federal government’s arsenal for getting the funds back from you. For example, the government can take a cut from your Social Security payments or your tax return. It could also garnish your wages. You could end up worse off that you were before in some cases.
Take extra care with private loans. Terms are usually unclear in these loans. Frequently, you are not aware of them until after executing the loan. After this happens, you may not be able to extricate yourself. Get all the information you need first. If you receive any individual great offer, use it to see if other lenders might compete with it.
You do not want student loans to be your sole source of income during you educational years. Keep in mind that you need to save up and look for scholarships or grants to get help. You should check out websites that offer scholarship matching to help you find ones that you may qualify for. Be sure to begin your search as soon as possible in order to be prepared.
Be sure your lender knows where you are, how to contact you and what your plans are. This is important as you will want to know all of the information on your loan and what stipulations are involved in your payback plan. You may even get some helpful advice from your lender about how to pay it back.
Don’t panic if you have a huge balance on your student loan that you have to repay. It looks big at first, but you will be able to whittle away at it. If you stay diligent with working and saving money, you will be able to attack your loans with full force.
Make certain you are fully aware of your repayment terms. A grace period is offered in some loans, others offer a forbearance, and other circumstances may dictate other options. You need to know what your options are and what the lender expects of you. Obtain this information prior to signing any documents.
Understanding loans is critical to the college experience. Borrowing large amounts of money at high interest rates can lead to big problems. So, keep this information in mind as you enter college and embark on your future.
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