Student loans make college education possible, but they are high risk if you don’t manage them wisely. That is why you need to know all about student loans before getting one. Continue on to discover the most important tips.
Know what kind of grace periods your loans offer. Typically this is the case between when you graduate and a loan payment start date. This will help you plan in advance.
Know all of your loan’s details. You must pay close attention to how much you owe, what the terms are and the name of your lending institution. All these details are involved in both repayment options as well as forgiveness potentials. This information is necessary to plan your budget accordingly.
Keep in contact with the lender. Make sure they always know your address, phone number and email, all of which can change often during your college experience. Anytime you receive a phone call, email or paper letter from your lender, pay attention to it as soon as it is received. Take whatever actions are necessary as soon as you can. Missing an important piece of mail can end up costing a great deal of money.
If you were laid off or are hit with a financial emergency, don’t worry about your inability to make a payment on your student loan. Most lenders can work with you if you lose your job. Just know that taking advantage of this option often entails a hike in your interest rates.
The best way to pay down your student loan debt early is to focus on the loans that come with a higher interest rate. You may owe more money if you don’t prioritize.
Grace Period
Know what the grace period is before you have to start paying for your loans. For Stafford loans, you should have six months. Perkins loans have a nine month grace period. For other loans, the terms vary. Be aware of exactly when you must start making payments, and be sure to make those payments on time!
Anyone on a budget may struggle with a loan. However, loans that offer a rewards program can soften the blow. Look at the SmarterBucks and LoanLink programs that can help you. These are very similar to cash back programs, where any dollars you spend can accumulate rewards which apply to your student 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 provide faulty information, processing can be delayed, and you may have to postpone starting classes.
Two superior Federal loans available are the Perkins loan and the Stafford loan. They are the safest and are also affordable. It ends up being a very good deal, because the federal government ends up paying the interest while you attend school. The Perkins tends to run around 5%. Subsidized Stafford loans offer interest rates no higher than 6.8 percent.
PLUS loans are a type of loan that is available only to parents and graduate students. The highest the interest rate will go is 8.5%. It’s higher than public loans, but lower than most private options. This is the best option for mature students.
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. They can also take money out of your paycheck. You will probably be worse off than before in some cases.
Take extra care with private loans. It may be challenging to find the terms. You may not even know them until you’ve signed the paperwork. You may not be able to get out of the loan then. Make sure you get the information you really need. If one offer is a ton better than another, talk to your other lenders and see if they’ll beat the offer.
When applying for loans, be sure you provide accurate information. One mistake could change how much you are offered. If you have any questions about the application, consult with your financial aid adviser at school.
Be aware of all your repayment options. If you believe finances will be tight after graduation, try to get a graduated repayment plan. This ensures your starting payments aren’t huge and go up slowly.
To make sure you get financially stable when it comes to student loans, try to get a job while you’re on campus. Doing this can help provide you with money from a source other than loans to help pay for your education, not to mention that you also wind up with a bit of extra spending money.
You must consider many details and different options regarding student loan choices. Your decisions will affect the rest of your life, long after you graduate. Wise borrowing is the way to go, so use this advice when applying for student loans.
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