You may see loan offers coming to you even before you have your high school graduation. It can seem very helpful towards achieving your college goals. However, There are things you must consider before deciding to take on such debt.
Keep in mind that there’s a grace period to follow before it’s time to pay a loan back. This is the amount of time you have before the lender will ask that your payments need to start. Knowing this allows you to make sure your payments are made on time so you can avoid penalties.
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. You should know that it can boost your interest rates, though.
Never panic when you hit a bump in the road when repaying loans. Many people have issues crop up unexpectedly, such as losing a job or a health problem. There are options like forbearance and deferments for most loans. However, the interest will build during the time you are not making payments.
Use a process that’s two steps to get your student loans paid off. First, be sure to pay the monthly amount due on each loan you have taken out. If you have money left over, apply that to the loan that has the highest interest associated with it. This will make things cheaper for you over time.
Grace Period
Make sure you understand the true length of your grace period so that you do not miss payments. For Stafford loans, the period is six months. Perkins loans give you nine months. Make sure to contact your loan provider to determine the grace period. Make certain you are aware of when your grace periods are over so that you are never late.
Squeeze in as many possible credit hours as you can to maximize your student loans. You may be able to scrape by with 12 hours, but try to at least carry 15 per semester. If possible, go for 18. This will assist you minimizing your loan amounts.
To expedite the process of a student loan, make sure the application is filled out accurately. Any information that is incorrect or incomplete can delay it being processed, potentially causing you to miss important deadlines and putting you behind in school.
If you don’t have good credit, and you are applying for a student loan from a private lender, you will need a co-signer. You must pay them back! If not, your co-signer will be held responsible.
Parents and graduate students can make use of PLUS loans. Normally you will find the interest rate to be no higher than 8.5%. This is a bit higher than Perkins and Stafford loans, but the rates are better for private loans. For this reason, this is a good loan option for more mature and established students.
Your school may want you to borrow from certain lenders. Some colleges allow lending companies to use the name of the college. This is frequently not the best deal. The school can get a portion of this payment. You should know about the loan before getting it.
Forget about defaulting on student loans as a way to escape the problem. There are several ways the government can get their money. The federal government can take your Social Security payments or take your tax refunds if money is owed. In addition, they can garnish your wages and take a significant portion of your take home pay. This can become financially devastating.
Private student loans should be considered carefully before you sign. Finding out the specific terms can be challenging. If you sign before you understand, you may be signing up for something you don’t want. After signing it, a loan is very hard to undo. Learn about each loan first. Compare offers and see if banks are willing to compete with each other for your loan.
Starting college means making important decisions, but none are quite as important as thinking about the debt you are about to take on. The decision to borrow money can be a perilous one if it’s entered into lightly. So, it is important to remember the tips you learned here when you go to college and continue your education.
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