Since a college education is so expensive, all high school students and their parents need to learn about student loans. Getting the right kind of loans under the right terms is possible, but not without a good amount of advance information. Read on to learn all there is to know about student loans.
Find out what the grace period is you are offered before you are expected to repay your loan. This is the period of time after your graduation before your payment is due. Knowing this can help you avoid hefty penalties by paying on time.
Make sure you understand the fine print related to your student loans. Stay on top of what your balance is and know which lender you borrowed from, plus what your repayment status is. These details are imperative to understand while paying back your loan. You need this information to budget yourself appropriately.
Make sure you are in regular contact with the lender. When you make changes to your address or phone number, make sure you let them know. Do not neglect any piece of correspondence your lender sends to you, whether it comes through the mail or electronically. Perform all actions to do as soon as you can. If you miss something, it may cost you.
Think about getting a private loan. There is not as much competition for this as public loans. 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. Ask locally to see if such loans are available.
Pay your loan off in two steps. Make sure you pay the minimum amount due each month. The second step is applying any extra money you have to your highest-interest-rate loan and not the one with the biggest balance. It’ll help limit your spend over a given time.
Grace Period
Be aware of the amount of time alloted as a grace period between the time you complete your education and the time you must begin to pay back your loans. Stafford loans have a grace period of six months. Perkins loans have a nine-month grace period. The amount you are allowed will vary between lenders. Make sure you know how long those grace periods are, and never pay late.
To help maximize the money you get from student loans, sign up for additional credit hours. 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. In the grand course of time, you will end up taking out fewer loans.
A lot of people apply for a student loan and sign things without having knowledge of what they’re doing. Asking questions and understanding the loan is essential. You do not want to spend more money on interest and other fees than you need to.
If your credit is abysmal and you’re applying for a student loan, you’ll most likely need to use a co-signer. Make your payments on time. If you don’t keep up, your co-signer will be responsible, and that can be a big problem for you and them.
PLUS loans are known as student loans for parents and also graduate students. The interest rates on these are kept reasonable. This is a bit higher than Perkins and Stafford loans, but the rates are better for private loans. This is often a good alternative for students further along in their education.
In a few short years of college, an astounding amount of expenses can be incurred by just about anybody. Under such circumstances, a considerable amount of debt can be accumulated in the form of student loans if you’re not careful. Luckily, this information will keep you from falling into common traps.
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