Offers for student loans can start arriving in your mail even before you graduate high school. You might think this is a terrific thing. But here are some things that you need to consider before you sign up for a future of debt.
Keep in mind that there’s a grace period to follow before it’s time to pay a loan back. The grace period is the amount of time between your graduation date and date on which you must make your first loan payment. This will help you plan in advance.
Be sure you understand the fine print of your student loans. You need to watch what your balance is, who the lender you’re using is, and what the repayment status currently is with loans. These facts will determine your loan repayment and forgiveness options. Budget wisely with all this data.
Think about getting a private loan. Public loans are available, but there is often a lot of competition for them. Private loans – especially small ones – do not have as much competition, and this means that there is funding available that most other people don’t even know about. Investigate around your community for private loans; even a small one can cover room and board for a term or two.
If you want to get any student loan paid ahead of time, it’s a good idea to pay off the ones with more interest. Calculating the terms properly will prevent spending more money than is necessary by the end of the loan.
Your loans are not due to be paid back until your schooling is complete. Make sure that you find out the repayment grace period you are offered from the lender. Many loans, like the Stafford Loan, give you half a year. Perkins loans have a nine-month grace period. There are other loans with different periods. It is important to know the time limits to avoid being late.
Pick a payment plan that works best for you. Many student loans will offer a 10 year repayment plan. If this is not ideal for you, then there are other choices out there to explore. You could extend the payment duration, but you’ll end up paying more. You may also use a portion of your income to pay once you are bringing in money. Some loan balances for students are let go when twenty five years have gone by.
Pay off larger loans as soon as possible. A lower principal means you will pay less interest on it. Try to pay off the loans that are large first. Once a big loan is paid off, simply transfer those payments to the next largest ones. When you make minimum payments against all your loans and pay as much as possible on the largest one, you can eventually eliminate all your student debt.
Monthly loan payments after college can be very intimidating. There are loan reward programs that can help people out. For example, you can look at SmarterBucks or LoanLink programs from Upromise. The are akin to cash back incentives, and the money spent works like a reward you can use toward your loan balance.
To make your student loan money stretch even farther, consider taking more credit hours. Though full-time student status requires 9-12 hours only, if you are able to take 15 or more, you will be able to finish your program faster. This will reduce the amount of loans you must take.
Many people get student loans without reading the fine print. If something is unclear, get clarification before you sign anything. This is one way a lender may collect more payments than they should.
College is a time filled with lots of decisions, not the least of which is how much debt you take on. Make sure not to take too much money with high interest rates. Therefore, keep in mind the advice in this article as you start your college journey.