Eventually, you might have to get yourself a student loan. Perhaps the time is now, or maybe it will happen in the future. No matter what, having extensive knowledge of the loan process will be very helpful. These tips will help you tremendously when applying for a loan.
Know what kind of grace periods your loans offer. This generally means the period after you graduate where the payments will become due. This can also give you a big head start on budgeting for your student loan.
Know the specifics about your loan. Keep a running total on the balance, know the repayment terms and be aware of your lender’s current information as well. These are three very important factors. It will help you budget accordingly.
If an issue arises, don’t worry. You will most likely run into an unexpected problem such as unemployment or hospital bills. Most loans will give you options such as forbearance and deferments. Keep in mind that interest often continues accruing, so do your best to at least make interest payments to keep from having a larger balance.
Stay in touch with the lender. Make sure they always know your address, phone number and email, all of which can change often during your college experience. Do not put off reading mail that arrives from the lender, either. Follow through on it immediately. Failing to miss any deadlines or regulations can mean risking losing quite a bit of money or time.
If you want to pay off student loans before they come due, work on those that carry higher interest rates. If your payment is based on what loans are the highest or lowest, there’s a chance you’ll be owing more at the end.
If you can’t make a payment on your loans because of unforeseen circumstances, don’t worry. Many times a lender will allow the payments to be pushed back if you make them aware of the issue in your life. Make sure you realize that going this route may result in increased interest.
Identify and specifically choose payment options that are suited to your personal circumstances. The ten year repayment plan for student loans is most common. If you can’t make this work for your situation, check out other options if you can. For instance, it may be possible to stretch out your payments for a longer period of time, although you will end up paying more interest. You can pay a percentage once the money flows in. Sometimes, they are written off after many years.
If an issue arises, don’t worry. Anything can come up and interfere with your ability to pay, such as a medical emergency or getting laid off from work. There are options that you have in these situations. Interest continues to compound, however, so a good strategy is to make interest only payments that will prevent your balance from getting bigger.
Pick a payment plan that works best for you. Many student loans come with a ten year length of time for repayment. If this isn’t working for you, there could be a variety of other options. You may need to extend the time you have to repay the loan. This often comes with an increase in interest. Think about what you “should” be making in the future and carefully go over everything with a trusted adviser. After 20 years, some loans are completely forgiven.
Use a two-step process to pay off your student loans. Start by making the minimum payments of each loan. Second, pay extra on the loan that has the highest interest. This will reduce how much money spent over time.
Pay off your loans in order of interest rates. Pay off the highest interest student loans first. Using additional money to pay these loans more rapidly is a smart choice. There is no penalty for early repayment.
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. Six months is usually the length for Stafford loans. Perkins loans are about 9 months. The amount you are allowed will vary between lenders. Make sure you know how long those grace periods are, and never pay late.
Pay off the loan with higher interest rates first so you can shrink the amount of principal you owe faster. The smaller your principal, the smaller the amount of interest that you have to pay. Focus on paying the largest loans off first. When a large loan is repaid, just start paying on the next ones you owe. When you make minimum payments against all your loans and pay as much as possible on the largest one, you can eventually eliminate all your student debt.
You might need a student loan for yourself or a child in the future. Understanding the process can make a substantial difference in what you eventually owe upon graduating. This article provided you with the basics, and you should apply them as needed.
To get a lot out of getting a student loan, get a bunch of credit hours. Generally, being a full-time student is seen as 9 to 12 hours per semester, but if you can squeeze in between 15 or 18, then you should be able to graduate sooner. This will decrease the loan amount.