Student loans are very important to most students. College can be very expensive. Fortunately, you can make wise student loan decisions when you have the right information.
Remain in contact with your lender. Always let them know when you change your phone number, mailing address or email address, and these things can happen often when you are in college. Anytime you receive a phone call, email or paper letter from your lender, pay attention to it as soon as it is received. Perform all actions to do as soon as you can. If you miss something, it may cost you.
Don’t worry if you can’t make a payment on your student loan due to a job loss or another unfortunate circumstance. Most lenders can work with you if you lose your job. Just be mindful that doing so could make your interest rates rise.
Grace Period
Know what the grace period is before you have to start paying for your loans. Six months is usually the length for Stafford loans. Perkins loans have a nine-month grace period. The amount you are allowed will vary between lenders. Be sure you know exactly when you will be expected to begin paying, and don’t be late!
Make sure that you specify a payment option that applies to your situation. Many student loans offer 10-year payment plans. If that isn’t feasible, there could be alternatives. Understand if you choose a longer repayment period you will end up having to pay more in interest. Consider how much money you will be making at your new job and go from there. The balances on some student loans have an expiration date at 25 years.
Pick a payment plan that works best for you. Most lenders allow ten years to pay back your student loan in full. Other options may also be available if that doesn’t work out. For example, you may be able to take longer to pay; however, your interest will be higher. You can also do income-based payments after you start earning money. Some loans are forgiven after a 25-year period.
Interest Rate
Prioritize your repayment of student loans by the interest rate of each one. It’s a good idea to pay back the loan that has the biggest interest rate before paying off the others. Using the extra money you have can get these things paid off quicker later on. You will not be penalized for speeding up your repayment.
Paying off your biggest loans as soon as you can is a sound strategy towards minimizing your overall principal. When you reduce your overall principal, you wind up paying less interest over the course of the loan. Pay the larger loans off to prevent this from happening. Once a large loan has been paid off, transfer the payments to your next large one. If you make minimum payments on your loans while paying as much as possible on the largest loan, you can eradicate your loan debt.
You may feel overburdened by your student loan payment on top of the bills you pay simply to survive. You can make things a bit easier with help from loan rewards programs. For instance, look into the Upromise programs called SmarterBucks and LoanLink. This can help you get money back to apply against your loan.
To make your student loan money stretch even farther, consider taking more credit hours. To be considered a full-time student, you usually have to carry at least nine or 12 credits, but you can usually take as many as 18 credit each semester, which means that it takes less time for you to graduate. When you handle your credit hours this way, you’ll be able to lessen the amount of student loans needed.
Fill your application out accurately to get your loan as soon as possible. If you fail to fill out the forms correctly, there might be delays in financing that can postpone your education.
Perkins Loan
The two best loans on a federal level are called the Perkins loan and the Stafford loan. These are very affordable and are safe to get. This is a good deal because while you are in school your interest will be paid by the government. The Perkins loan interest rate is 5%. The Stafford loans which are subsidized come at a fixed rate which is not more than 6.8%.
PLUS loans are student loans that are available to graduate students and to parents. Normally you will find the interest rate to be no higher than 8.5%. It’s higher than public loans, but lower than most private options. Therefore, it should be something to consider.
Your college may have motives of its own for recommending certain lenders. In some cases, a school may let a lender use the school’s name for a variety of reasons. This is oftentimes quite misleading to students and parents. Your school may already have a deal going with a particular lender. Make sure to understand all the nuances of a particular loan prior to accepting it.
College loans are something that almost everyone gets. It isn’t easy to figure out the perfect loan for you. By learning about student loans, you can save yourself heartache later on.
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