Since a college education is so expensive, all high school students and their parents need to learn about student loans. If you know what you’re doing, you can get a great loan. This article has what you need, so read on.
Keep in touch with the lender you’re using. When you make changes to your address or phone number, make sure you let them know. You must also make sure you open everything right away and read all lender correspondence via online or mail. Take action right away. You can end up spending more money than necessary if you miss anything.
If you have trouble repaying your loan, try and keep a clear head. Job losses or unanticipated expenses are sure to crop up at least once. Keep in mind that forbearance and deferment options do exist with most loans. Just remember that interest is always growing, so making interest-only payments will at least keep your balance from rising higher.
If you are considering paying off a student loan early, start with the loans with high interest rates. If you think you will be better off paying the one with the highest monthly payments first, you may be wrong. Best to look at the interest rates.
Grace Period
Be aware of the amount of time alloted as a grace period between the time you complete your education and the time you must begin to pay back your loans. Stafford loans provide a six month grace period. For Perkins loans, the grace period is nine months. Other loans vary. Know when you will have to pay them back and pay them on time.
Make sure that you specify a payment option that applies to your situation. Many of these loans offer a ten year repayment period. If this won’t work for you, there may be other options available. For instance, it may be possible to extend the loan’s term; however, that will result in a higher interest rate. You can put some money towards that debt every month. Sometimes you may get loan forgiveness after a period of time, often 25 years.
Pay off your loans in order of interest rates. The loan with the individual highest rate needs paid down fastest and first. Any extra cash you have lying around will help you pay these quicker. There are no penalties for early payments.
Get the maximum bang for the buck on your student loans by taking as many credits each semester as you can. Full-time status is usually 9-12 hours per semester, so getting between 15 and 18 can help you graduate sooner. This will assist you minimizing your loan amounts.
If you wish to get your student loan papers read quickly, be sure that your application is filled out without errors. If you provide faulty information, processing can be delayed, and you may have to postpone starting classes.
When applying for private loans without good credit, you will need a cosigner. Make every payment on time. If you’re not able to, then the co-signer is going to be responsible for the debt you have.
A PLUS loan is specifically oriented to address the needs of graduate students and/or parents. They cap their interest rate at 8.5 percent. This is a bit higher than Perkins and Stafford loans, but the rates are better for private loans. Therefore, this kind of loan can be useful for students who are older.
Your school could be biased toward certain lenders. Some schools let private lenders use their name. Such tactics are often misleading. The school might get an incentive if you use a certain lender. Know what the loan terms are before signing on the dotted line.
Going into default on your loans is not a wise idea. The government has many ways to get the money. The federal government can take your Social Security payments or take your tax refunds if money is owed. Additionally, they can garnish your wages. Usually, you will wind up being worse off than you were previously.
Many people spend a lot of money while they are in college, accumulating large debt. Under such circumstances, a considerable amount of debt can be accumulated in the form of student loans if you’re not careful. Luckily, this information will keep you from falling into common traps.
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