Student loans offer many a chance at higher learning that they would otherwise not have. However, these loans should not be entered into without sufficient knowledge of pitfalls and perks. The advice below can assist you in making great decisions about your educational future.
Read the fine print on student loans. Stay on top of what your balance is and know which lender you borrowed from, plus what your repayment status is. These facts will determine your loan repayment and forgiveness options. To devise a good budget, you must factor all this in.
Keep in touch with the lender you’re using. 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. It is also important to open and thoroughly read any correspondence you receive from your lender, whether it is through traditional or electronic mail. Make sure you take action whenever it is needed. If you miss something, that can mean a smaller loan.
Do not panic if a job loss or other emergency makes paying your student loan difficult. Usually, many lenders let you postpone payments if you are able to prove hardship. Just know that the interest rates may rise.
Private financing is something that you may want to consider. While public loans for students are available widely, there is a lot of competition and demand for them. A private student loan has less competition due to many people being unaware that they exist. Check your local community for such loans, which can at least cover books for a semester.
If you have trouble repaying your loan, try and keep a clear head. Unforeseen circumstances such as unemployment or health issues could happen. Make sure you are aware of the specific terms that apply to such circumstances, such as deferments or forbearance, which are part of most loan programs. But bear in mind that interest will still accrue, so consider making whatever payments you can to keep the balance in check.
If you don’t have a lot of “extra” money, student loans can really make life difficult for you. A rewards program may help things. Two such programs are SmarterBucks and LoanLink. These are similar to other programs that allow you to earn cash back. You can use this money to reduce your loan.
Two superior Federal loans available are the Perkins loan and the Stafford loan. They tend to be affordable and entail the least risk. This is a great deal due to your education’s duration since the government pays the interest. Perkins loan interest rates are at 5 percent. Subsidized Stafford Loans will have an interest rate that goes no higher than 6.8 percent.
If you have poor credit and are looking for a private loan, you will need a co-signer. Once you have the loan, it’s vital that you make all your payments on time. If you don’t keep up with payments on time, your co-signer will be responsible, and that can be a big problem for you and them.
Look into PLUS loans for your graduate work. The highest the interest rate will go is 8.5%. While this is generally higher than either Perkins or Stafford loans, it still has lower interest rates than the typical personal loan. Therefore, it should be something to consider.
Do not think that you can just default on student loans to get out of paying them. There are many tools in the federal government’s arsenal for getting the funds back from you. A couple of tactics they use to collect the money you owe is taking some tax return money, Social Security and even wage garnishment at your job. It is also possible for the government to garnish 15 percent of all disposable income. You can easily find yourself in a very bad position that will take many years to get out of and cause many headaches.
When you are filling out your financial aid application, make sure that you are positive there are no errors on it. Your accuracy may have an affect on the amount of money you can borrow. If you are concerned about possible errors, make an appointment with a financial aid counselor.
It is important to remain in contact with the lender. In this way, your lender will always be able to contact you with important information regarding your loan. They may give you some wise advice for repaying the loans.
Figure out what you have as repayment options. If you are worried about making ends meet after you leave school, consider asking for graduated payments. Using them, your beginning payments are smaller. Gradually though, they will go up as your earnings expectations increase.
If you have a large balance on student loans, don’t panic. This is something that can be paid back over time. If you stay on top of it, you can make a dent in your debt.
Most people wouldn’t be able to go to school if it wasn’t for loans. However, if you do not understand how best to use these loans, you can get in trouble quite easily. Utilize the tips above to keep things on course.