A student loan is something that many people have to take out at one point in their life. Maybe now is when you must do this, or maybe sometime this will occur in the future. Regardless, it is important to have a thorough understanding of loans in general. Below, you will find many tips to help you make sense of it all.
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. In order words, find out about when payments are due once you have graduated. Staying aware of when this period ends is the right way to make sure you never have late payments.
Remain in contact with your lender. Make sure they always know your address, phone number and email, all of which can change often during your college experience. Be certain you always open mail that comes from your lender, and that includes e-mail. Do whatever you must as quickly as you can. Missing anything in your paperwork can cost you valuable money.
You don’t need to panic if a problem arises during repayment of your loans. You could lose a job or become ill. Lenders provide ways to deal with these situations. Remember that interest accrues in a variety of ways, so try making payments on the interest to prevent balances from rising.
Focus on paying off student loans with high interest rates. You may think to focus on the largest one but, the accruing interest will add up to more over time.
Student Loans
You are offered a grace period after you graduate before you must start paying on your student loans. For Stafford loans, the period is six months. Perkins loans are about 9 months. The time periods for other student loans vary as well. Make certain you are aware of when your grace periods are over so that you are never late.
To maximize the value of your loans, make sure to take the most credits possible. Full-time status is usually 9-12 hours per semester, so getting between 15 and 18 can help you graduate sooner. This helps you shave off some of the cost of your loans.
Perkins Loan
The Perkins Loan and the Stafford Loan are both well known in college circles. They are the safest and are also affordable. One of the reasons they are so popular is that the government takes care of the interest while students are in school. The Perkins Loan has an interest rate of five percent. On the subsidized Stafford loan, it’s fixed at no higher than 6.8%.
If you try to get private loans with poor credit, you are sure to need a co-signer. You must be current on your payments. If you miss a payment, then your co-signer will not be happy because they are just as responsible for these payments as you are.
Your school could be biased toward certain lenders. Some schools let private lenders use their name. This can be very misleading. The school could be receiving money because of your choice. Therefore, don’t blindly put your trust in anything; do your own research.
Get rid of thinking that defaulting on a loan means freedom. Unfortunately if you do this, the federal government will use all means necessary to recover this debt. For instance, you might see money withheld from Social Security payments or even your taxes. In addition, they can garnish your wages and take a significant portion of your take home pay. You could end up worse off that you were before in some cases.
Be careful when it comes to private student loans. It can prove difficult to find out what the exact terms are. Oftentimes, you aren’t aware of the terms until after you have signed the papers. This makes it hard to learn about your options. Get as much information as you can. If you get an offer that’s good, speak with other lenders so you can see if they can offer the same or beat that offer.
Keep the communication lines open with your student loan lender. In this way, your lender will always be able to contact you with important information regarding your loan. They may even have some great tips on repayment.
Make sure you pay strict attention to the loan terms. Some loans provide a grace period or have a forbearance or other alternatives in payment. You have to figure out what kinds of options you have and what you should be getting from a lender. Read the entire loan agreement before signing any documents.
Communicate with all of your lenders both during college and after you graduate. Always update them when you move or change other contact information. This way, they can inform you of any pertinent changes made regarding your lender. You should also tell them if you withdraw, transfer, or graduate from college.
After all is said and done, you may need a student loan sometime in the near or the far future. Understanding the “ins and outs” of student loans will help you get the best deal for yourself. Take this advice seriously and go into the loan process with as much knowledge as possible.
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