Student loans generally begin showing up in your mailbox before you even graduate from high school. It might seem like a really good deal that someone out there is willing to help you attain a college education. Make sure to consider these things before applying for that loan.
Always stay in contact with your lender. Let them know if your number, email or address changes, all of which occur frequently during college years. Also, make sure that you immediately open and read every piece of correspondence from your lender, both paper and electronic. You should take all actions immediately. Missing an important piece of mail can end up costing a great deal of money.
Don’t fret when extenuating circumstances prevent you from making a payment. Many lenders will let you postpone payments if you have financial issues. Just be aware that doing so may cause interest rates to rise.
Grace Period
Your loans are not due to be paid back until your schooling is complete. Make sure that you find out the repayment grace period you are offered from the lender. Stafford loans typically give you six months. Perkins loans have a nine month grace period. Other loans will vary. Make certain you are aware of when your grace periods are over so that you are never late.
Select a payment option that works well for your particular situation. A lot of student loans let you pay them off over a ten year period. Other options are likely to be open to you if this option does not suit your needs. For example, you might have to take a while to pay a loan back, but that will make your interest rates go up. Consider how much money you will be making at your new job and go from there. Some balances pertaining to student loans get forgiven about 25 years later.
When it comes time to pay back your student loans, pay them off from higher interest rate to lowest. It’s a good idea to pay back the loan that has the biggest interest rate before paying off the others. Apply any extra dollars you have to pay off student loan balances faster. There are no penalties for paying off a loan faster.
Anyone on a strict budget who is facing the repayment of a student loan is put in a difficult situation. There are loan rewards programs that can help with payments. For examples of these rewards programs, look into SmarterBucks and LoanLink from Upromise. These give you rewards that you can apply toward your loan, so it’s like a cash back program.
To maximize the value of your loans, make sure to take the most credits possible. Full-time students typically have a minimum of nine to twelve hours per semester, but some schools let you take up to fifteen or even eighteen, speeding up your graduation date. This helps you shave off some of the cost of your loans.
Many people apply for student loans and sign paperwork without really understanding what they are getting into. If things feel unclear, it is important to get a better understanding of them right away. You do not want to spend more money on interest and other fees than you need to.
Perkins Loan
The best federal loans are the Stafford loan and the Perkins loan. This is because they come with an affordable cost and are considered to be two of the safest loans. This is a great deal that you may want to consider. The Perkins Loan has an interest rate of five percent. Subsidized Stafford loans have a fixed rate of no more than 6.8 percent.
If your credit isn’t the best and you are applying for a student loan, you will most likely need a co-signer. Make sure that your payments are up to date. If you don’t keep up with payments on time, your co-signer will be responsible, and that can be a big problem for you and them.
PLUS loans are available if you are a graduate student or the parent of one. The interest rate is no greater than 8.5%. This is higher than Stafford loans and Perkins loans, but it is better than rates for a private loan. This makes it a good option for established and mature students.
Understanding loans is critical to the college experience. Borrowing a large sum of money at high interest rates can turn into a huge financial burden. So, keep in mind what you’ve gone over here while you get into college and being working on the future.
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