Student loans are, for many, a necessary evil on the path to obtaining an advanced degree, or even just an undergraduate education. Lenders aren’t always keeping your best interests in mind, though. Keep reading to learn how to protect yourself.
Make sure you stay on top of applicable repayment grace periods. Typically this is the case between when you graduate and a loan payment start date. You can get a head start in making timely payments by knowing what your grace period is.
Private financing could be a wise idea. There are plenty of public student loans to be had, but the competition to get them is fierce. There’s much less competition for private student loans, with small pockets of money sitting around untapped from lack of attention. Ask locally to see if such loans are available.
If you’re having trouble repaying loans, don’t panic. Unemployment or health emergencies will inevitably happen. You may have the option of deferring your loan for a while. Make sure you realize that interest will keep building, so think about making at least interest payments so that you can keep balances from growing out of control.
Make sure that you specify a payment option that applies to your situation. Lots of student loans offer ten-year repayment plans. If you can’t make this work for your situation, check out other options if you can. 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. A lot of student loans will be forgiven after you’ve let twenty five years go by.
Select the payment choice that is best for you. Many loans offer payment over a decade. If this isn’t working for you, there could be a variety of other options. For example, you could extend the amount of time you have to pay, however you will probably have a higher interest rate. Another option would be a fixed percentage of your wages when you get a job. The balance of some student loans is forgiven after 25 years.
Fill your application out accurately to get your loan as soon as possible. If you fail to fill out the forms correctly, there might be delays in financing that can postpone your education.
The two best loans on a federal level are called the Perkins loan and the Stafford loan. These have some of the lowest interest rates. They are a great deal because the government pays the interest on them during the entirety of your education. The interest rate on a Perkins loan is 5 percent. The interest rate on Stafford loans that are subsidized are generally no higher than 6.8 percent.
If you have poor credit and are looking for a private loan, you will need a co-signer. Staying on top of your payments is essential. If you don’t your co-signer will be responsible for it.
PLUS loans are something that you should consider if graduate school is being funded. They bear an interest rate of no more than 8.5%. It’s higher than public loans, but lower than most private options. These loans are much better suited to an older student that is at graduate school or is close to graduating.
Get the idea out of your head that you will be forgiven for a student loan that you have defaulted on. The federal government will go after that money in many ways. They can take money off your tax refund, for example. The government may also try to take up around 15 percent of the income you make. In many instances, you’ll wind up in a position that is worse than where you started.
Be wary of private student loans. These can be tricky when it comes to the specifics surrounding the terms. It may be that you are unaware of them until it is too late. And at that moment, it may be too late to do anything about it. Gather as much facts and information as you are able to. If you receive an offer that’s great, see if other lenders can beat or match it.
You can save money by purchasing a meal plan from the college cafeteria. The best way to do this is to pay for meals rather than a specific dollar amount. Rather than paying for costly meals each time you sit down to eat, you pay one flat fee that covers everything.
Student loans are becoming a very common part of the college experience. Knowing all that you can about student loans before applying for them it the key to borrowing responsibly. Use these tips to streamline the process.