Student loans are the only vehicle to higher education for some. However, these loans should not be entered into without sufficient knowledge of pitfalls and perks. The tips below are great for helping you make smart choices when it comes to schooling and your finances.
Don’t eschew private student loans for financing a college education. While public student loans are widely available, there is much demand and competition for them. Private student loans will have less people getting them, and there will be small funds that go unclaimed because they’re small and people aren’t aware of them. Find out whether there are any agencies in your area that have loans that can cover the cost of school books or other small needs that you must have covered.
Grace Period
You don’t need to panic if a problem arises during repayment of your loans. Unemployment or health emergencies will inevitably happen. 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.
If you have any student loans, it’s important to pay attention to what the pay back grace period is. The grace period is the amount of time between your graduation date and date on which you must make your first loan payment. Knowing this can help you avoid hefty penalties by paying on time.
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. The period should be six months for Stafford loans. Perkins loans are about 9 months. Other loans vary. Make sure you know how long those grace periods are, and never pay late.
Be aware of the terms of any loans you take out. Keep track of this so you know what you have left to pay. These details are going to have a lot to do with what your loan repayment is like and if you can get forgiveness options. To devise a good budget, you must factor all this in.
Pick out a payment option that you know can meet the needs you have. Ten year plans are generally the default. If this doesn’t work for you, you may have other options. For instance, you may pay back within a longer period of time, but it will be with higher interest rates. You might even only have to pay a certain percentage of what you earn once you finally do start making money. Some balances on student loans are forgiven after a period of 25 years.
Make sure you stay in close contact with your lenders. Always let them know when you change your phone number, mailing address or email address, and these things can happen often when you are in college. Do not neglect any piece of correspondence your lender sends to you, whether it comes through the mail or electronically. Take the actions you need to take as quickly as you can. Missing an important piece of mail can end up costing a great deal of money.
Choose payment options that fit your financial circumstances. Most loans have a 10-year repayment plan. If this won’t work for you, there may be other options available. You may need to extend the time you have to repay the loan. This often comes with an increase in interest. It may even be possible to pay based on an exact percentage of your total income. Sometimes student loans are written off after an extended period of time.
You don’t need to worry if you cannot pay for your student loans because you are unemployed. Typically, most lenders will allow you to postpone your payments if you can prove you are having hardships. However, this can make it to where you have higher interest rates and more to pay back.
When you begin to pay off student loans, you should pay them off based on their interest rates. The loan with the individual highest rate needs paid down fastest and first. You will get all of your loans paid off faster when putting extra money into them. Remember, there are no penalties for paying off your loan early.
If an issue arises, don’t worry. Life problems such as unemployment and health complications are bound to happen. Keep in mind that forbearance and deferment options do exist with most loans. Remember that interest accrues in a variety of ways, so try making payments on the interest to prevent balances from rising.
Monthly student loans can seen intimidating for people on tight budgets already. Loan rewards programs soften the blow somewhat. Two such programs are SmarterBucks and LoanLink. These work like cash back programs, and the money you spend earns rewards that can be applied toward your loan.
Many people hate the thought of taking out a student loan. If you don’t understand what to look for, it can turn out bad. Utilize the tips above to keep things on course.
Take as many hours each semester as you think you can handle so you don’t waste any money. Full-time status is usually 9-12 hours per semester, so getting between 15 and 18 can help you graduate sooner. This helps you shave off some of the cost of your loans.