You may start getting student loan offers in your mailbox while you are still in high school. Sometimes it will seem like a good thing to get so much help towards the goals you’re trying to meet. In the end, you have to know what you’re doing before you pick any one loan.
Always figure out what the details of the loans you have out are. Keep track of this so you know what you have left to pay. This helps when it comes to payment plans and forgiveness options. This is must-have information if you are to budget wisely.
Do know that you are probably going to have a post-graduation grace period from your student loans before you are required to start making payments back. This is generally the period after graduation when the payments are due. This will help you plan in advance.
Never fear paying your student loans if you are unemployed or another emergency happens. A lot of the time a lender will allow a payment to be postponed if you show them you’re having a hard time. Just be mindful that doing so could make your interest rates rise.
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 of the paperwork that comes with your loan. You need to act immediately if a payment is needed or other information is required. Missing anything in your paperwork can cost you valuable money.
Don’t panic if you aren’t able to make a loan payment. Job loss and health crises are bound to pop up at one point or another. Lenders provide ways to deal with these situations. The interest will grow if you do this though.
When paying off your loans, go about it in a certain way. First, make sure that you meet the minimum monthly payments of each individual loan. Next, make sure to apply additional funds to loans bearing the highest rates of interest, not necessarily the loans with the greatest balance. You will reduce how much it costs in the long run.
There are two main steps to paying off student loans. First, ensure you make all minimum monthly payments. If you have money left over, apply that to the loan that has the highest interest associated with it. This will cut down on your liability over the long term.
Grace Period
When you graduate, know how much time you have before you have to start making payments on your loans. Many loans, like the Stafford Loan, give you half a year. It is about nine months for Perkins loans. For other loans, the terms vary. Know when you are to begin paying on your loan.
You are offered a grace period after you graduate before you must start paying on your student loans. For Stafford loans, it should give you about six months. For Perkins loans, the grace period is nine months. Other kinds of loans may have other grace periods. Be sure you know exactly when you will be expected to begin paying, and don’t be late!
Choose a payment plan that you will be able to pay off. In general, ten year plans are fairly normal for loan repayments. If that isn’t feasible, there could be alternatives. For instance, you could be given more time but have to pay more interest. You may have to pay a certain part of your income after you get some work. Sometimes you may get loan forgiveness after a period of time, often 25 years.
The debt you will end up with thanks to school can lead to tough decisions. A substantial loan with a high interest rate can end up being a huge problem. So, keep in mind what you’ve just read as you embark on the journey of higher education.
Tackle your student loans according to which one charges you the greatest interest. Go after high interest rates before anything else. Using your extra cash can help you get these student loans paid off quicker. There are no penalties for paying off a loan faster.
