You may start getting student loan offers in your mailbox while you are still in high school. The offer of so much assistance toward your college aspirations are likely to seem like a dream come true. It is important to learn all you can before taking on a mountain of debt.
Make it a point to be aware of all the important facets of your student loans. You must pay close attention to how much you owe, what the terms are and the name of your lending institution. These three things will affect future repayment plans and forgiveness options. You will also need to know these things if you want to have an accurate budget.
Keep in touch with the lender you’re using. Keep them updated on any change of personal information. Read all of the paperwork that comes with your loan. Make sure that you take all actions quickly. If you miss something, that can mean a smaller loan.
Do not overlook private sources of funds for college. There is not as much competition for this as public loans. Private loans are not in as much demand, so there are funds available. Find out whether there are any agencies in your area that have loans that can cover the cost of school books or other small needs that you must have covered.
Work hard to make certain that you get your loans taken care of quickly. First, be sure to pay the monthly amount due on each loan you have taken out. Second, if you have any extra money, use it to make extra payments on the loan that bears the higher interest rate rather than the one that bears the highest balance. This will reduce your spending in the future.
If you have the ability to pay more than what you owe on your loans, try to get those with the highest interest taken care of first. If you pay off the wrong loans first, you could end up paying more than you need to.
Grace Period
Check the grace period of your student loan. For Stafford loans, the period is six months. For Perkins loans, the grace period is nine months. The amount you are allowed will vary between lenders. Know precisely when you need to start paying off your loan so that you are not late.
Pick out a payment option that you know can meet the needs you have. The majority of student loans have ten year periods for loan repayment. You may be able to work a different plan, depending on your circumstances. You can pay for longer, but it will cost you more in interest over time. You can pay a percentage once the money flows in. Sometimes you may get loan forgiveness after a period of time, often 25 years.
Pick a payment plan that suits your particular needs. Most student loans allow for repayment over ten years. If this isn’t working for you, there could be a variety of other options. If it takes longer to pay, you will face a higher interest charge. Some student loans will base your payment on your income when you begin your career after college. After 20 years or so, some balances are forgiven.
Pay off your different student loans in terms of their individual interest rates. Go after high interest rates before anything else. Use extra funds to pay down loans more quickly. There is no penalty for early repayment.
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. These are similar to cash back programs in which you earn rewards for each dollar you spend, and you can apply those rewards toward your loan.
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 fail to fill out the forms correctly, there might be delays in financing that can postpone your education.
College is a time filled with lots of decisions, not the least of which is how much debt you take on. A substantial loan with a high interest rate can end up being a huge problem. Use the advice here to ensure your college experience is good.
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