Due to the high costs, many must take out student loans to get through college and university. However, it is not wise to enter into these loans without prior knowledge of their pitfalls and benefits. The following information with help you make heads or tails out of receiving financial aid for college.
Make sure you know what the grace period is for your loans before you need to start making payments. This is generally a pre-determined amount of time once you graduate that the payments will have to begin. Knowing this allows you to make sure your payments are made on time so you can avoid penalties.
Keep in contact with the lender. Make sure you update them with your personal information if it changes. Do not neglect any piece of correspondence your lender sends to you, whether it comes through the mail or electronically. You need to act immediately if a payment is needed or other information is required. It can be quite costly if you miss anything.
If you were laid off or are hit with a financial emergency, don’t worry about your inability to make a payment on your student loan. Many times a lender will allow the payments to be pushed back if you make them aware of the issue in your life. However, you may pay an increase in interest.
Paying down your student loans should be done using a two-step payoff method. First, make sure you are at least paying the minimum amount required on each loan. Next, pay extra on your loan with the largest interest rate instead of the one with the largest balance. This will make things cheaper for you over time.
If you have the ability to pay more than what you owe on your loans, try to get those with the highest interest taken care of first. If you think you will be better off paying the one with the highest monthly payments first, you may be wrong. Best to look at the interest rates.
Pay attention to how long the grace period is after your graduation before you student loan has to be repaid. Stafford loans typically allow six months. For Perkins loans, you have nine months. Different loans will be different. Do you know how long you have?
Choose the payment option that is best suited to your needs. Ten year plans are generally the default. If you don’t think that is feasible, you should check for alternatives. You can pay for longer, but it will cost you more in interest over time. Once you start working, you may be able to get payments based on your income. Some loans are forgiven in 25 years.
If you apply for a private student loan and your credit is not that great, you are going to need someone to co-sign for you. It’s a good idea to stay up to date with the payments you make. If you do not, you are affecting the credit of the person who went to bat for you.
A PLUS loan is a loan that can be secured by grad students as well as their parents. They have an interest rate that is not more than 8.5 percent. This costs more than Perkins or Stafford loans, but it will be a better rate than a private loan. These loans are much better suited to an older student that is at graduate school or is close to graduating.
Take great care when it comes to taking out private loans. The exact terms may not be spelled out clearly. Sometimes, you really will not know what you have gotten into until you’ve already committed to a loan. Once that happens, you may find it difficult to get out of the agreement. Learn all you can beforehand. If you get a great offer, check with other lenders to see if they will meet or beat it.
To stretch out your student loan money, try buying meal plans instead of meals via dollar amounts. This enables you to pay one flat price for every meal you eat, and not be charged for extra things in the cafeteria.
Try to get a part-time job to keep an income stream going while in school. This way you’ll be able to make your education easier to pay for instead of getting a loan, and in the end you’ll have some pocket money for anything you want.
There is no denying that most students could not start college, much less graduate, without student loans. If you don’t educate yourself about loans, it can lead to financial ruin. This material can put you in the best possible position.
This is a limited-time offer. We are not able to guarantee availability if you wait!
