Student loans are the only vehicle to higher education for some. Still, it is important to know all the responsibilities that come along with a student loan. This piece will help make your education and finance decisions easier.
If you have any student loans, it’s important to pay attention to what the pay back grace period is. The grace period is the time you have between graduation and the start of repayment. Knowing this will give you a head start on getting your payments in on time and avoiding hefty penalties.
Keep in close touch with your lender. Make sure you let them know if your contact information changes. You should also be sure to read all of the information you receive from the lender, whether electronic or paper. Do whatever you must as quickly as you can. If you miss important deadlines, you may find yourself owing even more money.
Use a two-step process to pay off your student loans. Try to pay off the monthly payments for your loan. Second, if you have any extra money, use it to make extra payments on the loan that bears the higher interest rate rather than the one that bears the highest balance. In this way, the amount you pay as time passes will be kept at a minimum.
If you are in the position to pay down your student loans, make the high interest loans your first priority. If you solely base your repayment by which ones have a lower or higher balance, then you might actually end up paying back more in the end.
Go with the payment plan that best fits what you need. Many student loans come with a 10-year plan for repayment. If this won’t work for you, there may be other options available. Understand if you choose a longer repayment period you will end up having to pay more in interest. You may be able to make your payments based on percentage of your income after you get a job. It may be the case that your loan is forgiven after a certain amount of time, as well.
Credit Hours
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. When you handle your credit hours this way, you’ll be able to lessen the amount of student loans needed.
Far too often people will rush into signing the student loan paperwork without carefully analyzing the terms and conditions of the loan. Ask questions so you can clear up any concerns you have. Otherwise, you could have much more debt than you were counting on.
Stafford Loan
The best federal loans are the Stafford loan and the Perkins loan. These are both safe and affordable. This is a good deal because while you are in school your interest will be paid by the government. The interest for a Perkins loan holds at five percent. The subsidized Stafford loan has an interest rate that does not exceed 6.8%.
Your school could be biased toward certain lenders. There are institutions that actually allow the use of their name by specific lenders. This can be very misleading. The school could benefit if you go with particular lenders. Make sure you know all the details of any loan before signing on the dotted line.
Double-check your application for financial aid to ensure that it is free of errors. This is critical because the information you provide directly affects the amount of money you are offered in loans. If you have any questions about the application, consult with your financial aid adviser at school.
Make sure the lender always has your updated contact information. This is something you have to do so you know what your loan is all about and what you have to do to pay the loan back later on. Your lender can also give you tips to repay your loan more effectively.
Look into all of your repayment options. Graduated payments are something to consider if you’re struggling financially. This plan offers lower payments amounts at the beginning of the loan. Over time, your payment amount will increase.
Money Coming
Rather than depending only on your student loans during school, you should bring in extra money with a part time job. This is a great idea because you have additional money coming in that can help supplement the money coming in from the student loan, and help pay some expenses.
We all know that many students are totally dependent on student loans. However, student loans can be tricky. You have to know what you are getting into. Use what you’ve just learned to make smart student loan decisions.
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