Student loans are an essential tool to affording a good education. Universities are expensive, and most families don’t have the kind of money they require just laying around the house. The piece below provides great tips on successfully getting and managing student loans.
Make sure you stay on top of applicable repayment grace periods. This is the period of time after your graduation before your payment is due. Knowing this will give you a head start on getting your payments in on time and avoiding hefty penalties.
Keep in touch with the lender you’re using. When you make changes to your address or phone number, make sure you let them know. Do not put off reading mail that arrives from the lender, either. You need to act immediately if a payment is needed or other information is required. If you miss important deadlines, you may find yourself owing even more money.
It is acceptable to miss a loan payment if serious extenuating circumstances have occurred, like loss of a job. Many lenders will let you postpone payments if you have financial issues. If you take this option, you may see your interest rate rise, though.
Implement a two-step system to repay the student loans. First, be sure to pay the monthly amount due on each loan you have taken out. Second, pay extra on the loan that has the highest interest. In this way, the amount you pay as time passes will be kept at a minimum.
You don’t need to panic if a problem arises during repayment of your loans. Health emergencies and unemployment are likely to happen sooner or later. Remember that forbearance and deferment options are widely available on a lot of 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.
If you are in the position to pay off student loans early and inclined to do so, make sure you begin with the loans that carry the highest rate of interest. Repaying based on balance size could actually cause you to pay more in interest than you otherwise would have.
Pay off all your student loans using two steps. First you need to be sure that you know what the minimum payments for the loans will be each month. Next, pay as much as you can into the balance on the loan which has the greatest interest rate. This will reduce your spending in the future.
Grace Periods
Know how much time you have in your grace period from the time you leave school until you must begin paying back your loans. Stafford loans typically allow six months. For a Perkins loan, this period is 9 months. Other types of student loans can vary. Know exactly the date you have to start making payments, and never be late.
Know how long you have between graduation and the commencement of loan payments. The period should be six months for Stafford loans. For Perkins loans, you have nine months. Other kinds of loans may have other grace periods. Make certain you are aware of when your grace periods are over so that you are never late.
Figure out what will work best for your situation. Ten year plans are generally the default. If this does not fit your needs, you may be able to find other options. For instance, it may be possible to extend the loan’s term; however, that will result in a higher interest rate. You also possibly have the option of paying a set percentage of your post-graduation income. The balances on some student loans have an expiration date at 25 years.
To help with paying off your loans, start paying off the loans by order of the interest rate that comes with each. The loan with the most interest should be paid off first. Then utilize the extra cash to pay off the other loans. Paying quicker than expected won’t penalize you in any way.
Take the maximum number of credit hours you can in your schedule to maximize the use of your loans. As much as 12 hours during any given semester is considered full time, but if you can push beyond that and take more, you’ll have a chance to graduate even more quickly. This lets you minimize the loan amounts you have to accrue.
Pay the large loans off as soon as you are able to. The less principal you owe overall, the less interest you will end up paying. Focus on the big loans up front. Once a large loan has been paid off, transfer the payments to your next large one. By making minimum payments on all of your loans and the largest payment possible on your largest loan, you will systematically eliminate your student loan debt.
A lot of people apply for a student loan and sign things without having knowledge of what they’re doing. Ask to get clarification on anything you don’t understand. This is an easy way for a lender to get more money than they are supposed to.
The prospect of monthly student loan payments can be somewhat daunting for someone on an already tight budget. Rewards programs can help. Look into something called SmarterBucks or LoanLink and see what you think. These give you rewards that you can apply toward your loan, so it’s like a cash back program.
If you have poor credit and are looking for a private loan, you will need a co-signer. Making payment on time is very important. If you get yourself into trouble, your co-signer will be in trouble as well.
To make your student loan money stretch even farther, consider taking more credit hours. Full-time is considered 9 to 12 hours per semester, take a few more to finish school sooner. In the grand course of time, you will end up taking out fewer loans.
PLUS loans are a type of loan option for parents and graduate students. The interest rate won’t be any larger than 8.5%. These rates are higher, but they are better than private loan rates. These loans are much better suited to an older student that is at graduate school or is close to graduating.
Some people sign the paperwork for a student loan without clearly understanding everything involved. It is vital that you understand everything clearly before agreeing to the loan terms. This is one way that lenders use to get more than they should.
Remember that your school may have its own motivations for recommending you borrow money from particular lenders. In some cases, a school may let a lender use the school’s name for a variety of reasons. This can be misleading. The school could be receiving money because of your choice. Understand the terms of the loan before you sign the papers.
In order to have your student loan paperwork go through as quickly as possible, make sure that you fill out your application accurately. Incorrect or inaccurate information will only delay the process, and that may result in your schooling pushed back to the following semester.
Be sure to fill out your applications for financial aid accurately. This is crucial because any mistakes could affect how much aid you are offered. Ask for help from an adviser if you need it.
Bad credit will mean you need a cosigner on a private loan. You must pay them back! If you don’t do this, your co-signer is liable for those debts.
To stretch your student loan money as far as it will go, purchase a meal plan by the meal instead of the dollar amount. This allows you to not worry about what’s on your plate each time you eat because each meal is a flat rate.
Plus Loans
Stay in contact with the bank who loaned you the money. This is something you have to do so you know what your loan is all about and what you have to do to pay the loan back later on. You should also ask the lender if they have any advice that will help you to pay off your loan more quickly.
PLUS loans are a type of loan that is available only to parents and graduate students. The PLUS loans have an interest rate below 8.5%. This rate exceeds that of a Perkins loan or a Stafford loan, but is lower than private lenders offer. Therefore, this type of loan is a great option for more established and mature students.
Do not go into panic mode when you see how much you owe. This is something that can be paid back over time. Stay on task at all times for the best results.
Be very cautious about private student loans. These can be tricky when it comes to the specifics surrounding the terms. You may not even know them until you’ve signed the paperwork. Then, it will be very hard to free yourself from them. Try to get every bit of information you can obtain. If you receive an offer that’s great, see if other lenders can beat or match it.
Make certain you understand your terms of repayment. Some loans give you grace periods or can be put into forbearance, and there are other options depending on your circumstance. You must know what the options and expectations are from the lender. You should find out this information before you sign anything.
Because school costs a lot of money to go to, many people need to continue their education with the help of student loans. Getting a loan for a student isn’t as hard when the right advice is followed. Use the tips you just read to help you. Get a great education soon by getting approved for your student loan!
If you’re not going to be able to make your payment, you should get a hold of the lender you’re using as soon as you can. You will find they are likely willing to work together with you so you can stay current. You may even qualify for a deferral or reduced payments.
