Just about everyone is acquainted with a person who has had his life ruined by massive amounts of debts due to student loans. Unfortunately, many young people blithely take out loans to pay for school without understanding the long-reaching implications. Luckily, this article contains information that will help you sort the wheat from the chaff in terms of student loans.
Remain in contact with your lender. Anytime there are changes to your personal information such as where you live, phone number, or email, it is important they are updated right away. In addition, when you get mail from your lender, be sure to read everything. Do whatever you need to as soon as you can. If you miss any piece of information, you may end up spending more money.
Private Student Loans
Don’t eschew private student loans for financing a college education. While you can easily find public ones, they have a lot of competition since they’re in demand. Many people do not know about private student loans, so it may be easier to get this type of financing. Explore any options within your community.
Use a two-step process to pay off your student loans. First, ensure you meet the minimum monthly payments on each separate loan. Second, pay anything extra to the loan with the highest interest rate, not the one with the highest balance. This will minimize the amount of money you spend over time.
Highest Interest Rate
If you want to pay down student loans faster than scheduled, start with the highest interest rate loans first. You definitely want to pay down the ones with the highest interest rate, because taking care of the lower ones could cause you to end up paying more money.
Know what the grace period is before you have to start paying for your loans. For example, you must begin paying on a Stafford loan six months after you graduate. Perkins loans enter repayment in nine months. There are other loans with different periods. Make sure you know how long those grace periods are, and never pay late.
Figure out what will work best for your situation. In the majority of cases, student loans offer a 10 year repayment term. Check out all of the other options that are available to you. For instance, you could be given more time but have to pay more interest. You may be able to make your payments based on percentage of your income after you get a job. Some balances are forgiven if 25 years have passed.
Pay off your loans in order of interest rates. It’s a good idea to pay back the loan that has the biggest interest rate before paying off the others. Apply any extra dollars you have to pay off student loan balances faster. Remember, there are no penalties for paying off your loan early.
Your principal will shrink faster if you are paying the highest interest rate loans first. The less of that you owe, the less your interest will be. Make a concerted effort to pay off all large loans more quickly. After you have paid off your largest loan, continue making those same payments on the next loan in line. Making these payments will help you to reduce your debt.
If you don’t have a lot of “extra” money, student loans can really make life difficult for you. However, loans that offer a rewards program can soften the blow. For example, you can look at SmarterBucks or LoanLink programs from Upromise. These are essentially programs that give you cash back and applies money to your loan balance.
To help maximize the money you get from student loans, sign up for additional credit hours. Try to graduate as soon as you possibly can by taking 15 or 18 hours each semester. This will assist you minimizing your loan amounts.
Fill out each application completely and accurately for faster processing. If you provide faulty information, processing can be delayed, and you may have to postpone starting classes.
As you fill out your application for financial aid, ensure that everything is correct. Your accuracy may have an affect on the amount of money you can borrow. If you are unsure of anything in your application, talk with a financial aid counselor at your school.
Look into all of your repayment options. If you believe finances will be tight after graduation, try to get a graduated repayment plan. This will make the first few payments very small, increasing over time.
Let your lender know immediately if you aren’t going to be able to make your payment. The financial place is going to be likely to help you work with keeping an account as current as possible if you take the steps to contact them. You may qualify for reduced costs or deferral.
Student loans impact your life during and long after your college years. For this reason, if you want to borrow money to help with an education, you need to pay some attention to your actions. The tips above are for anyone considering taking out loans to further their education.
This is a limited-time offer. We are not able to guarantee availability if you wait!
