Many people must resort to student loans to get the degree they desire. Naturally, unscrupulous, predatory lenders are in abundance to take advantage of hopeful students. Read on to learn how you can avoid being taken advantage of when seeking financing for your education.
Learn about your loan’s grace period. This is typically a six to nine month period after your graduation before repayments start. Keep this information handy and avoid penalties from forgetting your loans.
Stay in contact with all lenders. Always let them know anytime your personal information changes, because this happens quite a bit when you’re in college. Be certain you always open mail that comes from your lender, and that includes e-mail. You need to act immediately if a payment is needed or other information is required. If you miss something, it could cost you more.
Do not panic if a job loss or other emergency makes paying your student loan difficult. A lot of times, if you can provide proof of financial hardship, lenders will let you to delay your payments. However, you should know that doing this could cause your interest rates to increase.
Do not forget about private financing. While you can easily find public ones, they have a lot of competition since they’re in demand. Private loans have a lot of advantages that public loans do not. Investigate around your community for private loans; even a small one can cover room and board for a term or two.
Student Loans
Choose your payment option wisely. A lot of student loans give you ten years to pay it back. There are other options if you can’t do this. For example, you might be given a longer time to pay. Keep in mind that this option comes with higher interest. You may have to pay a certain part of your income after you get some work. Certain student loans forgive the balances once 25 years are gone by.
Pick out a payment option that you know will suit the needs you have. Most student loans have a ten year plan for repayment. If this isn’t working for you, there could be a variety of other options. For instance, you might secure a longer repayment term, but you will end up paying more in interest. Some student loans will base your payment on your income when you begin your career after college. On occasion, some lenders will forgive loans that have gone unpaid for decades.
Reduce the principal when you pay off the biggest loans first. That means you will generally end up paying less interest. Focus on paying off big loans first. After you have paid off the largest loan, begin paying larger payments to the second largest debt. Making these payments will help you to reduce your debt.
The idea of paying off a student loan every month can seem daunting for a recent grad on a tight budget. There are loan rewards programs that can help with payments. For instance, check out SmarterBucks and LoanLink, both of which are offered by Upromise. These give you rewards that you can apply toward your loan, so it’s like a cash back program.
Take the maximum number of credit hours you can in your schedule to maximize the use of your loans. Full-time status is usually 9-12 hours per semester, so getting between 15 and 18 can help you graduate sooner. This helps you minimize the amount of your loans.
The best loans that are federal would be the Perkins or the Stafford loans. Generally, the payback is affordable and reasonable. This is a great deal that you may want to consider. Interest rates for a Perkins loan will be around 5%. The interest is less than 6.8 percent on any subsidized Stafford loans.
Be aware that you may need a co-signer for a private loan if your credit isn’t good. It is vital you keep current with all your payments. Otherwise, the co-signer will also be on the hook for your loans.
If you are in graduate school, a PLUS loan may be an option. The highest the interest rate will go is 8.5%. This is a higher rate than Stafford or Perkins loans, however it’s better than most private loans. This may be a suitable option for your situation.
Some schools get a kickback on certain student loans. There are institutions that actually allow the use of their name by specific lenders. This can mislead you sometimes. The school could be receiving money because of your choice. Know what is going on before you sign.
You aren’t free from your debt if you default on your loans. The federal government will go after that money in many ways. They can take your income taxes or Social Security. The government may also take 15 percent of your income. Most of the time, not paying your student loans will cost you more than just making the payments.
Private student loans should be considered carefully before you sign. It can be hard to find out the exact terms. In many cases, you won’t know until you’ve signed the contract. If there are terms you find unfavorable at this point, then it can be really hard to back out of the deal. Learn about the loan up front. If you are offered great terms, talk to other lenders and ask if they will offer the same terms.
Millions of aspiring students count on student loans to attain the education necessary for a chance at success. The key is learning everything you can about student loans before you need them. Use the advice listed above to make the process even easier.
This is a limited-time offer. We are not able to guarantee availability if you wait!
