You might start getting student loan offers in the mail while still far from finishing high school. It may seem like a blessing to be offered such an abundance of help towards your college goals. But, you should think over a few things before you get into this kind of a debt.
Always stay in contact with your lender. Let them know if your number, email or address changes, all of which occur frequently during college years. Read all mail you get from lenders. Take any requested actions as soon as you can. You can end up spending more money than necessary if you miss anything.
Understand the grace period of your loan. This usually means the period of time after graduation where the payments are now due. Having this knowledge of when your payments are scheduled to begin will avoid incurring any penalties.
Don’t worry about not being able to make a payment on your student loans if something unexpected like job loss has happened. Usually, many lenders let you postpone payments if you are able to prove hardship. Just know that taking advantage of this option often entails a hike in your interest rates.
Keep in contact with the lender. Tell them when anything changes, such as your phone number or address. Anytime you receive a phone call, email or paper letter from your lender, pay attention to it as soon as it is received. If any requests are made or important stipulations are shared with you, act on them right away. Missing anything could make you owe a lot more money.
There are two steps to approach the process of paying off student loans you have taken out. Begin by figuring out how much money you can pay off on these student loans. If you have money left over, apply that to the loan that has the highest interest associated with it. This will keep your total expenditures to a minimum.
Student Loans
Choose a payment option based on your circumstances. A lot of student loans give you ten years to pay them back. If you don’t think that is right for you, look into other options. For instance, you can take a longer period to pay, but that comes with higher interest. You might also be able to pay a percentage of your income once you begin making money. Some loans’ balances get forgiven after 25 years.
Private financing is something that you may want to consider. While public student loans are widely available, there is much demand and competition for them. Not as many students opt for private student loans and money stays unclaimed because not too many people are aware of them. Talk to people you trust to find out which loans they use.
Reduce the principal when you pay off the biggest loans first. A lower principal means you will pay less interest on it. Stay focused on paying the bigger loans first. When you pay off one loan, move on to the next. Making your minimum payments on every loan, and the largest you can on your most expensive one, can really help you get rid of student loan debt.
Know how much time your grace period is between graduating and when you need to start paying back loans. For Stafford loans, the period is six months. For Perkins loans, you’ll have a nine month grace period. Make sure to contact your loan provider to determine the grace period. Know what you have to pay when, and pay on time!
The prospect of having to pay a student loan every month can be hard for people that are on hard budget already. A good loan rewards program can make it all more manageable. Look at websites such as SmarterBucks and LoanLink to learn about this kind of program offered by Upromise. How much you spend determines how much extra will go towards your loan.
When you’re trying to pay off a student loan, be sure you pay them in order of 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. There is no penalty for repaying sooner than expected.
Squeeze in as many possible credit hours as you can to maximize your student loans. Sure a full time status might mean 12 credits, but if you can take 15 or 18 you’ll graduate all the quicker. This lets you minimize the loan amounts you have to accrue.
Pay the large loans off as soon as you are able to. As your principal declines, so will your interest. Stay focused on paying the bigger loans first. Once it is gone, you can focus on smaller loans. The best system for repaying your student loans is to make large payments on your biggest student loan while continuously making the minimum payment on smaller student loans.
Fill out your paperwork the best that you can. If you make any errors on the paperwork, this can cause a hold up in your getting the loan, which could cause you to be unable to pay for school when the semester starts.
Understanding loans is critical to the college experience. If you choose to borrow more than you actually need and getting loans at higher interest rates could create some pretty big issues. So, it’s important to remember these tips when you go to college.
PLUS loans are student loans that are available to graduate students and to parents. They have a maximum interest rate of 8.5 percent. Although it is higher than Perkins and Stafford Loans, you still get a much better rate than one that is private. Therefore, it should be something to consider.
