Many people cannot even consider attending a college or university without taking out a student loan. That said, these loans shouldn’t be dealt with until you know the perks and pitfalls of them. The ideas presented within the following paragraphs can help you make wise decisions about your future.
Always know all the information pertinent to your loans. You need to know how much you owe, your repayment status and which institutions are holding your loans. These three things will affect future repayment plans and forgiveness options. This information is needed for proper budgeting.
Do not panic if a job loss or other emergency makes paying your student loan difficult. A lot of the time a lender will allow a payment to be postponed if you show them you’re having a hard time. Just know that taking advantage of this option often entails a hike in your interest rates.
Don’t panic if you aren’t able to make a loan payment. Unforeseen circumstances such as unemployment or health issues could happen. There are options like forbearance and deferments for most loans. It’s important to note that the interest amount will keep compounding in many instances, so it’s a good idea to at least pay the interest so that the balance itself does not rise further.
How long is your grace period between graduation and having to start paying back your loan? Stafford loans usually have one half year before the payments have to be made. Perkins loans have a nine-month grace period. Grace periods for other loans vary. Know what you have to pay when, and pay on time!
When repaying student loan obligations, prioritize them by interest rate. Pay off the highest interest student loans first. Anytime you have extra cash, apply it toward your student loans. You don’t risk penalty by paying the loans back faster.
Pay off big loans with higher interest rates first. That means you will generally end up paying less interest. Focus on paying the largest loans off first. After you have paid off the largest loan, begin paying larger payments to the second largest debt. This will help you decrease your debt as fast as possible.
For those on a budget already stretched to the max, the idea of a student loan can be scary. You can make things a bit easier with help from loan rewards programs. Look at programs like SmarterBucks and LoanLink via Upromise. These give you rewards that you can apply toward your loan, so it’s like a cash back program.
Make sure to understand everything about student loans before signing anything. Ask to get clarification on anything you don’t understand. A lender may wind up with more money that necessary if there is a term that you don’t understand.
Many students resort to student loans to pay off college. But, if you don’t understand what goes into getting a good student loan, it can cause you trouble in the future. Use this information to help you find student loans.