Most high school students begin getting student loan information long before needed. You might think this is a terrific thing. It is important to learn all you can before taking on a mountain of debt.
Make sure you stay on top of applicable repayment grace periods. Typically this is the case between when you graduate and a loan payment start date. Knowing this allows you to make sure your payments are made on time so you can avoid penalties.
Know that there’s likely a grace period built into having to pay back any loan. The grace period is the time you have between graduation and the start of repayment. 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.
You should not necessarily overlook private college financing. Because public loans are so widely available, there’s a lot of competition. Student loans from private sources are not as popular. They are available in smaller increments and are often unclaimed because people don’t know about them. Talk to people you trust to find out which loans they use.
Know the specifics about your loan. You must pay close attention to how much you owe, what the terms are and the name of your lending institution. These details all affect loan forgiveness and repayment options. Budgeting is only possible with this knowledge.
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. For Stafford loans, you should have six months. For Perkins loans, you have nine months. Other loans will vary. Make sure that you are positive about when you will need to start paying and be on time.
Private financing is something that you may want to consider. Public loans are available, but there is often a lot of competition for them. Private student loans are far less tapped, with small increments of funds laying around unclaimed due to small size and lack of awareness. Look around for these kinds of loans, and you may be able to cover part of your schooling.
Tackle your student loans according to which one charges you the greatest interest. Try to pay the highest interest loans to begin with. Whenever you have a little extra money, put it towards your student loans to pay them off as fast as possible. Remember, there are no penalties for paying off your loan early.
Don’t panic if you cannot make your payments on your student loans. Anything can come up and interfere with your ability to pay, such as a medical emergency or getting laid off from work. Keep in mind that forbearance and deferment options do exist with most loans. It’s important to note that the interest amount will keep compounding in many instances, so it’s a good idea to at least pay the interest so that the balance itself does not rise further.
To make your student loan money stretch even farther, consider taking more credit hours. You will graduate more quickly if you get to 15 or 18 hours each semester rather than 9 or 12. This will help in reducing your loan significantly.
Try paying off student loans with a two-step process. Start by making the minimum payments of 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. This will keep to a minimum the total sum of money you utilize over the long run.
The Stafford and Perkins loans are good federal loans. These two are considered the safest and most affordable. They are a great deal since the government pays your interest while you’re studying. The Perkins tends to run around 5%. On Stafford loans that are subsidized, the loan will be fixed and no larger than 6.8%.
If you can pay off any loans before they are due, pay off the ones with the highest interest first. If you try to pay off the ones with the lowest balances first, you may pay more interest that you have to.
If your credit isn’t the best and you are applying for a student loan, you will most likely need a co-signer. It is vital that you stay current on your payments. If not, the cosigner is accountable for your debt.
Grace Period
PLUS loans are known as student loans for parents and also graduate students. The interest rates on these are kept reasonable. While it may be more than other loans, it is cheaper than you will get through a private lender. These loans are much better suited to an older student that is at graduate school or is close to graduating.
It is important to know how much time after graduation you have before your first loan payment is due. Stafford loans offer six months of grace period. For Perkins loans, you’ll have a nine month grace period. Other types can vary. Know what you have to pay when, and pay on time!
Be wary of private student loans. The exact terms may not be spelled out clearly. Never sign an agreement without understanding the terms of the contract. After signing it, a loan is very hard to undo. Get all the pertinent information you can. If you receive a good offer, go to other lenders and see if they’ll beat that offer.
College requires lots of decision making, but taking out loans is perhaps the area of most concern to many. Figuring out how much to borrow, along with paying high interest can get you into some hot water. So, keep in mind what you’ve gone over here while you get into college and being working on the future.
If possible, maintain a job while you are attending school. This allows you to offset some of your expenses without a loan, and it can give you some spending money as well.