Since a college education is so expensive, all high school students and their parents need to learn about student loans. Getting the right kind of loans under the right terms is possible, but not without a good amount of advance information. Keep reading to learn all you need to know.
Keep in touch with the lender you’re using. Make sure you let them know if your contact information changes. When your lender send you information, either through snail mail or e mail, read it that day. Make sure that you take all actions quickly. If you don’t do this, then it can cost you in the end.
Learn about your loan’s grace period. This usually refers to the amount of time you are allowed after you graduate to pay back the loan. When you stay on top of this, this will help you to maintain better financial control so that you don’t incur any extra fees or bad credit marks.
Don’t let setbacks throw you into a tizzy. You will most likely run into an unexpected problem such as unemployment or hospital bills. Do know that you have options like deferments and forbearance available in most loans. Make sure you realize that interest will keep building, so think about making at least interest payments so that you can keep balances from growing out of control.
Stay in communication with all lenders. Keep them updated on your personal information. It is also important to open and thoroughly read any correspondence you receive from your lender, whether it is through traditional or electronic mail. Take any and all actions needed as soon as possible. If you forget about a piece of mail or put something aside, you could be out a bunch of money.
Implement a two-step system to repay the student loans. Make sure you pay the minimum amount due each month. The second step is applying any extra money you have to your highest-interest-rate loan and not the one with the biggest balance. This will reduce your spending in the future.
If you can’t make a payment on your loans because of unforeseen circumstances, don’t worry. When hardship hits, many lenders will take this into consideration and give you some leeway. Just be aware that doing so may cause interest rates to rise.
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.
Do not panic if an emergency makes paying your loans temporarily difficult. Many issues can arise while paying for your loans. Do know that you have options like deferments and forbearance available in most loans. Interest will build up, so try to pay at least the interest.
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 offer a period of six months. Perkins loans have a nine month grace period. Other kinds of loans may have other grace periods. Know when you are expected to pay them back, and make your payments on time!
Pay off all your student loans using two steps. First, make sure you are at least paying the minimum amount required on each loan. Next, make sure to apply additional funds to loans bearing the highest rates of interest, not necessarily the loans with the greatest balance. You will reduce how much it costs in the long run.
To help with paying off your loans, start paying off the loans by order of the interest rate that comes with each. Pay off the loan with the largest interest rate first. Any extra cash you have lying around will help you pay these quicker. Paying quicker than expected won’t penalize you in any way.
Grace Period
The thought of paying on student loans can be daunting. You can minimize the damage a little with loan reward programs. For instance, check out SmarterBucks and LoanLink, both of which are offered by 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.
Pay attention to how long the grace period is after your graduation before you student loan has to be repaid. Stafford loans have a grace period of six months. Perkins loans offer a nine month grace period. Make sure to contact your loan provider to determine the grace period. Be sure you know exactly when you will be expected to begin paying, and don’t be late!
Squeeze in as many possible credit hours as you can to maximize your student loans. While full-time status often is defined as 9 or 12 hours a semester, if you can get to 15 or even 18, you can graduate much sooner. This will help in reducing your loan significantly.
To help with paying off your loans, start paying off the loans by order of the interest rate that comes with each. The one carrying the highest APR should be dealt with first. Using any extra cash available can help pay off student loans faster. Remember, there are no penalties for paying off your loan early.
Stafford and Perkins loans are two of the best that you can get. These are both safe and affordable. They are a great deal since the government pays your interest while you’re studying. The Perkins Loan has an interest rate of five percent. On a subsidized Stafford loan, it will be a fixed rate of no larger than 6.8 percent.
Increase your credit hours if possible. Sure a full time status might mean 12 credits, but if you can take 15 or 18 you’ll graduate all the quicker. This will assist you minimizing your loan amounts.
For private loans, you may require a co-signature if you have no credit or bad credit. You must be current on your payments. If you do not, you are affecting the credit of the person who went to bat for you.
You do not want student loans to be your sole source of income during you educational years. Try and save money wherever you can, looking into grants or scholarships to help with the cost. There are many websites available that can help match you with grants or scholarships that you may qualify for. You should begin your search early as funds go quickly.
One type of student loan that is available to parents and graduate students is the PLUS loans. They cap their interest rate at 8.5 percent. These rates are higher, but they are better than private loan rates. This is the best option for mature students.
Get a meal plan on campus; this will save you money in the long run. That way, you can pay a flat fee instead of being nickel and dimed.
Don’t think that you won’t have to pay your debt back. There are several ways the government can get their money. For example, it can step in and claim a portion of your tax return or Social Security payments. The government also has the right to claim 15 percent of all your income. You will probably be worse off than before in some cases.
Be sure your lender knows where you are, how to contact you and what your plans are. You must know all that you can about your loan, and this includes all requirements, possible penalties, etc. You should also ask the lender if they have any advice that will help you to pay off your loan more quickly.
Be wary of private student loans. It can be difficult to figure out what the terms are exactly. Never sign an agreement without understanding the terms of the contract. Then, it will be very hard to free yourself from them. Learn about the loan up front. Compare an offer with those given by other lenders to find out who offers the best rates.
Know what your repayment options are. If you believe finances will be tight after graduation, try to get a graduated repayment plan. This way, initial payments are small and don’t increase until later when you will probably have more money.
To be sure that you’re able to spend your student loan money right, get your meal plan that pays by meals and not dollar amounts. Rather than paying for costly meals each time you sit down to eat, you pay one flat fee that covers everything.
Young adults can incur a lot of expenses during their time at college. Sadly, when a student takes out a loan, they may find themselves falling onto to hard times in the future. Luckily for you, the paragraphs you just read can help you navigate the treacherous waters.
Rather than depending only on your student loans during school, you should bring in extra money with a part time job. 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.
