Student loans can help to cover your living expenses while in college. But, loans always have to be repaid. A loan means that the money will have to be paid back within a certain timeframe. To learn what you must know about any loans you take out, read the following interesting tips.
Learn about your loan’s grace period. This usually means the period of time after graduation where the payments are now due. Staying aware of when this period ends is the right way to make sure you never have late payments.
Know all the little details of your student loans. Keep a running total on the balance, know the repayment terms and be aware of your lender’s current information as well. These facts will determine your loan repayment and forgiveness options. This information is necessary to plan your budget accordingly.
Stay in communication with all lenders. Always let them know anytime your personal information changes, because this happens quite a bit when you’re in college. Do not neglect any piece of correspondence your lender sends to you, whether it comes through the mail or electronically. Follow through on it immediately. Missing anything could make you owe a lot more money.
When paying off student loans, do it using a two-step process. The first thing you need to do is be certain that you are making the minimum required monthly payment on each loan. Second you should pay whatever you’re making extra to a loan that has a high interest rate, not the one with a higher balance. That way, you will end up spending a lesser amount overall.
Focus on paying off student loans with high interest rates. If you get your payments made on the loans that have the lowest or the highest, it can cost you extra in the end.
How long is your grace period between graduation and having to start paying back your loan? If you have Stafford loans, you will usually have about 6 months. For Perkins loans, you’ll have a nine month grace period. Different loans will be different. Know what you have to pay when, and pay on time!
Choose the payment option that is best suited to your needs. Many student loans offer 10-year payment plans. There are often other choices as well. You might get more time with higher interest rates. Once you start working, you may be able to get payments based on your income. The balances on some student loans have an expiration date at 25 years.
When it comes time to pay back your student loans, pay them off from higher interest rate to lowest. Begin with the loan that has the highest rate. Any extra cash you have lying around will help you pay these quicker. You don’t risk penalty by paying the loans back faster.
You should try to pay off the largest loans first. That means you will generally end up paying less interest. Concentrate on repaying these loans before the others. After you have paid off the largest loan, begin paying larger payments to the second largest debt. The quickest way to pay down these loans is to tackle the largest one first, but keep making payments to the smaller ones in order to quickly pay down the entire debt.
The idea of paying off a student loan every month can seem daunting for a recent grad on a tight budget. Loan rewards programs can help a little with this, however. For instance, look into the Upromise programs called SmarterBucks and LoanLink. These are essentially programs that give you cash back and applies money to your loan balance.
Squeeze in as many possible credit hours as you can to maximize your student loans. To be considered a full-time student, you usually have to carry at least nine or 12 credits, but you can usually take as many as 18 credit each semester, which means that it takes less time for you to graduate. This will reduce the amount of loans you must take.
To get student loans to go through quicker, fill out the documents properly. Incorrect or inaccurate information will only delay the process, and that may result in your schooling pushed back to the following semester.
Stafford and Perkins loans are the most advantageous federal loans to get. They are the safest and least costly loans. They are a great deal, because the government covers your interest while you are still in school. Interest rate on the Perkins loan is five percent. On the subsidized Stafford loan, it’s fixed at no higher than 6.8%.
Look into PLUS loans for your graduate work. The highest the interest rate will go is 8.5%. Although it is higher than Perkins and Stafford Loans, you still get a much better rate than one that is private. This is the best option for mature students.
Your college may have motives of its own for recommending certain lenders. Some schools let private lenders use the name of the school. This can mislead you if you are not careful. Schools may actually receive money from the lender of you end up taking out a loan. Make sure that you are aware of all the stipulations involved in a loan prior to taking it.
Always double and triple check your financial aid form. This is crucial because any mistakes could affect how much aid you are offered. If you have doubts about any of the information, consult a financial aid rep.
By going over what you’re learning here, you can make sure that you know all you need to know about student loans. It is hard to get a great deal on a student loan, but it’s possible. Refer back to this article when you are trying to choose the best loan for your situation.