Student Loans: Advice For College Students

If you have had to look at the costs of individual colleges lately, you probably had some sticker shock over the price. Most people cannot pay for college on their own. If you are trying to find a way to afford an education, a student loan can help.

Know that there’s likely a grace period built into having to pay back any loan. This is important for avoiding penalties that may result. Knowing this allows you to make sure your payments are made on time so you can avoid penalties.

Make sure you stay in close contact with your lenders. Let them know if your number, email or address changes, all of which occur frequently during college years. Be certain you always open mail that comes from your lender, and that includes e-mail. You should take all actions immediately. Missing anything could make you owe a lot more money.

It is acceptable to miss a loan payment if serious extenuating circumstances have occurred, like loss of a job. Usually, most lenders let you postpone payments if some hardship is proven. However, you should know that doing this could cause your interest rates to increase.

Think about getting a private loan. Public loans are available, but there is often a lot of competition for them. A private student loan has less competition due to many people being unaware that they exist. Look at these loans at a local college since they can cover one semester worth of books.

Try not to panic if you can’t meet the terms of a student loan. Emergencies are something that will happen to everyone. Luckily, you may have options such as forbearance and deferral that will help you out. Interest continues to compound, however, so a good strategy is to make interest only payments that will prevent your balance from getting bigger.

When paying off your loans, go about it in a certain way. Begin by ensuring you can pay the minimum payments on each of your loans. Second, pay extra on the loan that has the highest interest. That will save you money.

If you are thinking about paying off any of your student loans ahead of schedule, you should focus on the ones that have the highest interest. If you get your payments made on the loans that have the lowest or the highest, it can cost you extra in the end.

Grace Period

Know how much time your grace period is between graduating and when you need to start paying back loans. For Stafford loans, the period is six months. For Perkins loans, the grace period is nine months. Other loans offer differing periods of time. Know when you will have to pay them back and pay them on time.

Go with the payment plan that best fits what you need. Many of these loans offer a ten year repayment period. If this does not fit your needs, you may be able to find other options. For instance, it may be possible to extend the loan’s term; however, that will result in a higher interest rate. After you begin to make money, you might be able to use a certain percentage of that income to help pay down the student loan. After 25 years, some loans are forgiven.

Choose the payment option that is best suited to your needs. Most student loans allow for repayment over ten years. If this doesn’t work for you, you might have another option. For example, you might take a long time to pay but then you’ll have to pay a lot more in interest. You may also have to pay back a percentage of the money you make when you get a job. On occasion, some lenders will forgive loans that have gone unpaid for decades.

Student Loans

Pay off your different student loans in terms of their individual interest rates. Begin with the loan that has the highest rate. Using your extra cash can help you get these student loans paid off quicker. Paying quicker than expected won’t penalize you in any way.

Having to make a monthly student loan payment is hard for a budget that is already stretched thin. You can make things a bit easier with help from loan rewards programs. Two such programs are SmarterBucks and LoanLink. They will make small payments towards your loans when you use them.

Two of the most popular school loans are the Perkins loan and the often mentioned Stafford loan. This is because they come with an affordable cost and are considered to be two of the safest loans. It ends up being a very good deal, because the federal government ends up paying the interest while you attend school. The Perkins loan carries an interest rate of 5%. On the subsidized Stafford loan, it’s fixed at no higher than 6.8%.

Keep in mind that your school could have other motivations when they recommend certain lenders. Some lenders use the school’s name. This can be misleading. They may receive a type of payment if certain lenders are chosen. Make sure you are aware of all the loan’s details before you decide to accept it.

Student loans help people afford colleges, but they must be paid back. You will need to pay off these debts though. With the advice from this article, you can get a college education without bankrupting yourself.