Student loans are the only vehicle to higher education for some. However, it is not wise to enter into these loans without prior knowledge of their pitfalls and benefits. The following information with help you make heads or tails out of receiving financial aid for college.
Know that there’s likely a grace period built into having to pay back any loan. Typically this is the case between when you graduate and a loan payment start date. When you know what it is, you will have time to make a payment plan that will help you pay on time without penalties.
Always know all the information pertinent to your loans. You need to stay on top of your balances, your lenders and the repayment status in which you find yourself at any given time. These details will significantly influence the repayment options available to you, as well as the loan forgiveness terms you will face. This also helps when knowing how prepare yourself when it comes time to pay the money back.
Do not panic if a job loss or other emergency makes paying your student loan difficult. Lenders will typically provide payment postponements. Just remember that doing this may raise interest rates.
Don’t eschew private student loans for financing a college education. There are lots of student loans available, and there is also a lot of demand and a lot of competition. A private student loan has less competition due to many people being unaware that they exist. Explore any options within your community.
Pay off all your student loans using two steps. First, ensure you meet the minimum monthly payments on each separate loan. Next, make sure to apply additional funds to loans bearing the highest rates of interest, not necessarily the loans with the greatest balance. This will minimize the amount of money you spend over time.
Know what the grace period is before you have to start paying for your loans. Stafford loans typically allow six months. For a Perkins loan, this period is 9 months. The amount you are allowed will vary between lenders. Keep in mind exactly when you’re supposed to start paying, and try not to be late.
Choose your payment option wisely. You will most likely be given 10 years to pay back a student loan. If that doesn’t work for you, some other options may be out there for you. For instance, you could be given more time but have to pay more interest. The company may be willing to work with a portion of your net income. Some balances are forgiven if 25 years have passed.
Choose the payment option that is best suited to your needs. Many loans offer payment over a decade. If this isn’t right for you, you may be eligible for different options. Examples include lengthening the time it takes to repay the loan, but having a higher interest rate. You may also have the option of paying a percentage of income you earn once you start earning it. It’s even the case that certain student loans are forgiven after a certain time period, typically 25 years.
When paying off your student loans, try paying them off in order of their interest rates. The loan with the largest interest rate should be your first priority. Apply any extra dollars you have to pay off student loan balances faster. There are no penalties for paying off a loan more quickly than warranted by the lender.
Anyone on a budget may struggle with a loan. There are frequently reward programs that may benefit you. Places to check out are SmarterBucks and LoanLink which are programs available from Upromise. The are akin to cash back incentives, and the money spent works like a reward you can use toward your loan balance.
Take a large amount of credit hours to maximize your loan. Full time is 9-12 hours, but you can go as high as 8. This will keep your loans to a minimum.
If you wish to get your student loan papers read quickly, be sure that your application is filled out without errors. Incorrect and incomplete information gums up the works and causes delays to your education.
Most people wouldn’t be able to go to school if it wasn’t for loans. However, if you don’t know what you are doing, then you risk financial ruin later. Keep this information close by so you can use it it help during the process of securing a student loan.