Things You Should Know About Student Loans
While there is no doubt that student loans can help you achieve a college education, they can also be disastrous. It is key that you understand everything about student loans before making that final commitment. Read on to discover some valuable information you can use when dealing with student loans.
Make sure you understand the fine print related to your student loans. You need to know how much you owe, your repayment status and which institutions are holding your loans. These important items are crucial when it comes time to pay back the loan. Use this information to create a budget.
Stay in communication with all lenders. Keep them updated on your personal information. Also, make sure that you immediately open and read every piece of correspondence from your lender, both paper and electronic. You must act right away if information is required. If you forget about a piece of mail or put something aside, you could be out a bunch of money.
Focus on paying off student loans with high interest rates. If you think you will be better off paying the one with the highest monthly payments first, you may be wrong. Best to look at the interest rates.
Check the grace period of your student loan. Stafford loans offer a period of six months. Perkins loans have a nine-month grace period. Different loans will be different. Know when you are expected to pay them back, and make your payments on time!
Tackle your student loans according to which one charges you the greatest interest. Begin with the loan that has the highest rate. Then utilize the extra cash to pay off the other loans. There are no penalties for early payments.
Take a large amount of credit hours to maximize your loan. You will graduate more quickly if you get to 15 or 18 hours each semester rather than 9 or 12. This will keep your loans to a minimum.
Two superior Federal loans available are the Perkins loan and the Stafford loan. These two are considered the safest and most affordable. They are a great deal because you will get the government to pay your interest during your education. Interest rate on the Perkins loan is five percent. On the subsidized Stafford loan, it’s fixed at no higher than 6.8%.
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. Make every payment on time. If not, your co-signer will be held responsible.
PLUS loans are student loans that are available to graduate students and to parents. The PLUS loans have an interest rate below 8.5%. While it may be more than other loans, it is cheaper than you will get through a private lender. It might be the best option for you.
You aren’t free from your debt if you default on your loans. There are several ways the government can get their money. The federal government can garnish your taxes and disability payments. The government may also try to take up around 15 percent of the income you make. You could end up worse off that you were before in some cases.
Heed caution when dealing with private loans. It can be difficult to figure out what the terms are exactly. You may find it difficult to navigate through it all until after you are already stuck. Then, it will be very hard to free yourself from them. Obtain as much information with regard to the terms as possible. If you like an offer, see if other lenders will give you an even better one.
Don’t finance your whole college education by using student loans. Find out other ways to get your tuition paid and consider working part time. You should check out websites that offer scholarship matching to help you find ones that you may qualify for. Start right away to get the entire process going and leave yourself enough time to prepare.
When you are completing your application for financial aid, be sure that there are no mistakes. This is critical for your ability to get the maximum amount in a loan that is available to you. If there is any doubt in your mind that you filled it out right, you should consult a financial aid rep at your school.
Get a meal plan on campus; this will save you money in the long run. This way you won’t get charged extra and will only pay one fee per meal.
Remain in contact with whoever is providing the money. This can help you understand how to pay back your loan efficiently. Lenders can also give you advice about paying your loans off.
Find a job you can do on campus to help augment the income you get from student loans. That way you can offset some of the expenses of your education in ways other than a loan, and you can also end up with some extra pocket money to carry around.
Contact the lender quickly if you suspect you will find it difficult to make your payment on time. You are much more likely to have the financial institution work to help you if you show good faith. You may qualify for reduced costs or deferral.
Even once you graduate, keep communication going with your lenders. Contact them with personal information changes like phone number, email, address, and name. In this way, you will know if there are changes in your lender information or the terms of your loan. You must also let them know when you transfer, graduate, or even leave the college.
There is a lot to know regarding taking out a loan. Whatever choices you make may impact your future. Make smart choices and only take out the loans you absolutely need.