Most people cannot get a college education without incurring student loan debt. It is important to do your homework on loans in advance. Read below to get a good student loan education to will help prepare you to pay it back.
Make sure you stay on top of applicable repayment grace periods. This is the period of time after your graduation before your payment is due. When you know what it is, you will have time to make a payment plan that will help you pay on time without penalties.
Always be aware of what all the requirements are for any student loan you take out. Keep a running total on the balance, know the repayment terms and be aware of your lender’s current information as well. These details all affect loan forgiveness and repayment options. Use this information to create a budget.
Stay in contact with your lender. Keep them updated on your personal information. 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. If you miss any piece of information, you may end up spending more money.
Never panic when you hit a bump in the road when repaying loans. Job losses or unanticipated expenses are sure to crop up at least once. Do know that you have options like deferments and forbearance available in most loans. Interest continues to compound, however, so a good strategy is to make interest only payments that will prevent your balance from getting bigger.
Pay your student loans using a 2-step process. Begin by ensuring you can pay the minimum payments on each of your loans. Second, pay anything extra to the loan with the highest interest rate, not the one with the highest balance. You will reduce how much it costs in the long run.
If you are in the position to pay down your student loans, make the high interest loans your first priority. If you get your payments made on the loans that have the lowest or the highest, it can cost you extra in the end.
Go with the payment plan that best fits what you need. Lots of student loans offer ten-year repayment plans. If these do not work for you, explore your other options. You might get more time with higher interest rates. You can pay a percentage once the money flows in. It may be the case that your loan is forgiven after a certain amount of time, as well.
Fill your application out accurately to get your loan as soon as possible. If you give them information that isn’t right or is filled with mistakes, it can mean the processing will be delayed. This can put you a whole semester behind!
Stafford Loan
Two superior Federal loans available are the Perkins loan and the Stafford loan. These are the most affordable and the safest. These are great options because the government handles your interest while you are in school. A typical interest rate on Perkins loans is 5 percent. On a subsidized Stafford loan, it will be a fixed rate of no larger than 6.8 percent.
If you don’t have very good credit and need a student loan, chances are that you’ll need a co-signer. It is vital that you stay current on your payments. If you miss a payment, then your co-signer will not be happy because they are just as responsible for these payments as you are.
PLUS loans are available if you are a graduate student or the parent of one. The interest rate won’t be any larger than 8.5%. This is a bit higher than Perkins and Stafford loan, but less than privatized loans. This makes it a good option for established and mature students.
Certain Lenders
Your school could be biased toward certain lenders. There are schools that allow certain lenders to utilize the school’s name. This can mislead you sometimes. A school might get a kickback for you signing up for that lender. You should know about the loan before getting it.
Forget about defaulting on student loans as a way to escape the problem. The government will come after you. Claiming part of your income tax return or your Social Security payments are only two examples. The government even has the right to take up to fifteen percent of what it deems your disposable income. You can easily find yourself in a very bad position that will take many years to get out of and cause many headaches.
Never depend solely on student loans for paying for college. Try and save money wherever you can, looking into grants or scholarships to help with the cost. There are many valuable scholarship sites to tap into. Look as early as you can to have the greatest number of options.
To make sure that your student loan dollars go as far as possible, buy a meal plan that goes by the meal rather than the dollar amount. That way, you can pay a flat fee instead of being nickel and dimed.
You need to understand what all of your options are when it comes to loan repayment. If you believe finances will be tight after graduation, try to get a graduated repayment plan. This allows your initial payments to be smaller, then as time goes on they gradually increase when hopefully you are making more money.
If possible, maintain a job while you are attending school. In this way, you will be able to offset certain expenses in ways besides loans, and you will be able to enjoy a bit of spending money as well.
If you’re pursuing a higher degree, then you realize how inevitable the debt of a student loan is. Unless school costs begin to lessen, most people will be faced with this reality. You now have some great information that can help you take on student loans more responsibly.