College costs continue to rise every year, so every young person attending college needs to learn about student loans. Getting a good loan with good terms can happen, but before you set out you need some information first. Read on and learn what you should know.
Be mindful of any grace period you have prior to having to repay your loan. Typically this is the case between when you graduate and a loan payment start date. Being aware of this will help you get a jump start on payments, which will help you avoid penalties.
Know your loan details inside and out. You must pay close attention to how much you owe, what the terms are and the name of your lending institution. These details can all have a big impact on any loan forgiveness or repayment options. You will also need to know these things if you want to have an accurate budget.
Know how long the grace period is between the date of your graduation and the date on which you must start repaying the loans. The period should be six months for Stafford loans. Perkins loans enter repayment in nine months. For other loans, the terms vary. Make certain you are aware of when your grace periods are over so that you are never late.
Select a payment option that works well for your particular situation. Most student loan companies allow the borrower ten years to pay them back. If you can’t make this work for your situation, check out other options if you can. For example, you might be given a longer time to pay. Keep in mind that this option comes with higher interest. You can pay a percentage once the money flows in. Some student loans offer loan forgiveness after a period of 25 years has elapsed.
Student Loans
Pick out a payment option that you know will suit the needs you have. Most student loans allow for repayment over ten years. If this isn’t possible, then look around for additional options. For instance, you can possibly spread your payments over a longer period of time, but you will have higher interest. You can also possibly arrange a deal where you pay a certain percentage of your overall post-graduation income. Sometimes student loans are forgiven after 25 years.
The idea of paying off a student loan every month can seem daunting for a recent grad on a tight budget. A rewards program may help things. For instance, look into SmarterBucks and LoanLink, products of Upromise. These allow you to earn rewards that help pay down your loan.
Increase your credit hours if possible. Though full-time student status requires 9-12 hours only, if you are able to take 15 or more, you will be able to finish your program faster. In the grand course of time, you will end up taking out fewer loans.
If you do not have excellent credit and you must put in an application to obtain a student loan through private sources, you will require a co-signer. It’s a good idea to stay up to date with the payments you make. 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.
One type of student loan that is available to parents and graduate students is the PLUS loans. They have an interest rate that is not more than 8.5 percent. This rate exceeds that of a Perkins loan or a Stafford loan, but is lower than private lenders offer. This means that this is a suitable choice for students who are a bit older and better established.
Your school may want you to borrow from certain lenders. Schools sometimes let private lenders use the name of the school. This is really quite misleading. The school might actually get a commission for your loan. Understand the terms of the loan before you sign the papers.
The cost of education these days is through the roof. Poor choices in financing a college education can negatively impact a young adult’s future. It is fortunate that you have the valuable material in this article to help you avoid the usual pitfalls.
This is a limited-time offer. We are not able to guarantee availability if you wait!
