Getting A Leg Up: Student Loans Tips
There are many stories about people who have more debt from their student loans than they can fathom paying. Make sure that you do not borrow too much money with student loans. With luck, the following article can help you sift through the information out there and make wise choices.
Do know that you are probably going to have a post-graduation grace period from your student loans before you are required to start making payments back. This is the period of time after your graduation before your payment is due. When you have this information in mind, you can avoid late payments and penalty fees.
Don’t panic when you struggle to pay your loans. Life problems such as unemployment and health complications are bound to happen. Virtually all loan products offer some form of a forbearance or deferment option that can frequently help. Just be mindful that interest continues to accrue in many options, so at least consider making interest only payments to keep balances from rising.
If you have more than one student loan, pay each off according to interest rates. You should pay off the loan that has the highest interest first. By concentrating on high interest loans first, you can get them paid off quickly. There is no penalty for repaying sooner than expected.
Lower your principal amounts by repaying high interest loans first. The less principal that is owed, the less you’ll have to pay in interest. Focus on paying the largest loans off first. After you’ve paid your largest loan off in full, take the money that was previously needed for that payment and use it to pay off other loans that are next in line. When you make minimum payments on each loan and apply extra money to your biggest loan, you get rid of the debts from your student loans systematically.
Monthly student loans can seen intimidating for people on tight budgets already. There are loan reward programs that can help people out. For example, you can look at SmarterBucks or LoanLink programs from Upromise. These give you rewards that you can apply toward your loan, so it’s like a cash back program.
Take as many hours each semester as you think you can handle so you don’t waste any money. As much as 12 hours during any given semester is considered full time, but if you can push beyond that and take more, you’ll have a chance to graduate even more quickly. This will keep your loans to a minimum.
Fill your application out accurately to get your loan as soon as possible. If you give wrong or incomplete information, it can slow down processing and you may not be able to start when you planned. This can put you behind by a year.
The Perkins Loan and the Stafford Loan are both well known in college circles. Many students decide to go with one or both of them. These are good loans because the government pays the interest while you are still in school. The Perkins loan interest rate is 5%. The interest is less than 6.8 percent on any subsidized Stafford loans.
If you do not have excellent credit and you must put in an application to obtain a student loan through private sources, you will require a co-signer. You should be sure to stay on top of your payments and never miss one. Otherwise, the co-signer will also be on the hook for your loans.
PLUS loans are available if you are a graduate student or the parent of one. They cap their interest rate at 8.5 percent. While it may not beat a Perkins or Stafford loan, it is generally better than a private loan. Because of this, you should get this option only if you’re an established and mature student.
Your school may want you to borrow from certain lenders. For example, there are schools that allow the use of their name by select private lenders. This can be very misleading. The school may receive some sort of payment if you agree to go with a certain lender. Therefore, don’t blindly put your trust in anything; do your own research.
Do not think that defaulting will relieve you from your student loan debts. The government has multiples ways to collect on debt. For example, they can claim a little of a tax return or even a Social Security payment. They can also take money out of your paycheck. This will put you in a very bad position.
It’s tempting to do it, but you should never make student loans the only path of paying for your schooling. You should save money and look for grants and scholarships too. Do a quick Google search to find websites that can match you up with scholarships that are available for your specific situation. Be sure you start to search soon so you’re able to qualify for the best deals.
Be sure to double check all forms that you fill out. This is critical because the information you provide directly affects the amount of money you are offered in loans. If you are unsure of anything in your application, talk with a financial aid counselor at your school.
Don’t panic if you have a huge balance on your student loan that you have to repay. Though it is considerable, the lenders do not expect it in one lump sum. If you just work hard and save money, you can take care of your loans easily.
Lots of young graduates suffer from crippling debt right after they get their degrees. It is important to fully understand the terms of any student loan you apply for and agree to. Using the tips from this article, it is possible for anyone to successfully navigate this arena.