Since a college education is so expensive, all high school students and their parents need to learn about student loans. If you don’t have good advice, you may not get the best loan. Continue to read to learn what you should know.
Always know all the information pertinent to your loans. You need to watch what your balance is, who the lender you’re using is, and what the repayment status currently is with loans. These are three very important factors. This is must-have information if you are to budget wisely.
Keep in contact with the lender. Make sure they know your current address and phone number. Also, make sure that you immediately open and read every piece of correspondence from your lender, both paper and electronic. Follow through on it immediately. You may end up spending more money otherwise.
Don’t worry if you can’t make a payment on your student loan due to a job loss or another unfortunate circumstance. Lenders will typically provide payment postponements. Just know that when you do this, interest rates might go up.
Try paying off student loans with a two-step process. First, make sure that you meet the minimum monthly payments of each individual loan. After that, pay extra money to the next highest interest rate loan. This will reduce how much money spent over time.
You are offered a grace period after you graduate before you must start paying on your student loans. Six months is usually the length for Stafford loans. For Perkins loans, you have nine months. Other loans offer differing periods of time. Make sure that you are positive about when you will need to start paying and be on time.
Make certain that the payment plan will work well for you. Most loans have a 10-year repayment plan. If this won’t work for you, there may be other options available. You could choose a higher interest rate if you need more time to pay. You might also be able to pay a percentage of your income once you begin making money. Some student loan balances are forgiven after twenty five years have passed.
Pay off your loans in order of interest rates. Pay off the highest interest rate loan first. Paying a little extra each month can save you thousands of dollars in the long run. You won’t have any trouble if you do your repayment faster.
To get a lot out of getting a student loan, get a bunch of credit hours. Full-time status is usually 9-12 hours per semester, so getting between 15 and 18 can help you graduate sooner. This will help lower your loan totals.
The simplest loans to obtain are the Stafford and Perkins. These two are considered the safest and most affordable. They are favorable due to the fact that your interest is paid by the government while you are actually in school. There’s a five percent interest rate on Perkins loans. Subsidized Stafford Loans will have an interest rate that goes no higher than 6.8 percent.
If you apply for a private student loan and your credit is not that great, you are going to need someone to co-sign for you. It is vital that you stay current on your payments. Otherwise, the other party must do so in order to maintain their good credit.
One form of loan that may be helpful to grad students is the PLUS loan. The PLUS loans have an interest rate below 8.5%. This rate exceeds that of a Perkins loan or a Stafford loan, but is lower than private lenders offer. It’s a good option for students pursuing higher education.
Keep in mind that your institution of learning may have ulterior motives for steering you toward specific lenders. For example, there are schools that allow the use of their name by select private lenders. This is somewhat misleading. Schools may actually receive money from the lender of you end up taking out a loan. Understand every aspect of your loan right off the bat.
It does not take long for college attendees to rack up high college expenses. Part of that process involves student loan debt that can be truly harmful if acquired in an unwise manner. Use the information you have just learned to help yourself avoid such trouble.