There may come a time when you find yourself in need of a student loan. Maybe you need one now, or perhaps it’ll happen down the road. Whatever the case may be, educating yourself on the subject will make sure you get the right one. Here are some things you need to know to learn more about this.
If you have any student loans, it’s important to pay attention to what the pay back grace period is. This is generally the period after graduation when the payments are due. Being aware of this will help you get a jump start on payments, which will help you avoid penalties.
Maintain contact with your lender. Anytime there are changes to your personal information such as where you live, phone number, or email, it is important they are updated right away. In addition, be sure to open and read all correspondence that you receive from your lender right away, whether it arrives electronically or via snail mail. Take any requested actions as soon as you can. Missing an important piece of mail can end up costing a great deal of money.
If you were laid off or are hit with a financial emergency, don’t worry about your inability to make a payment on your student loan. 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 when you do this, interest rates might go up.
Private financing is one choice for paying for school. Student loans from the government are plentiful, but they come with a lot of competition. Private student loans will have less people getting them, and there will be small funds that go unclaimed because they’re small and people aren’t aware of them. Explore the options in your community.
When paying off student loans, do it using a two-step process. Try to pay off the monthly payments for your loan. Second, you will want to pay a little extra on the loan that has the higher interest rate, and not just the largest balance. This will cut down on your liability over the long term.
Know how much time your grace period is between graduating and when you need to start paying back loans. Stafford loans offer six months of grace period. Perkins loans are about 9 months. The amount you are allowed will vary between lenders. This is important to avoid late penalties on loans.
Pay off the loan with higher interest rates first so you can shrink the amount of principal you owe faster. The less principal that is owed, the less you’ll have to pay in interest. Focus on the big loans up front. After you have paid off your largest loan, continue making those same payments on the next loan in line. If you make at least the minimum payment on all loans and large payments on the biggest loan, your student loan balances will disappear.
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. It’s a good idea to stay up to date with the payments you make. If you fail to do so, the co-signer will be responsible for the payments.
If you are in graduate school, a PLUS loan may be an option. The highest the interest rate will go is 8.5%. Although this is greater than Perkins loans and Stafford loans, it’s much better than the private loan rates. It might be the best option for you.
Keep in mind that the school you attend could have a hidden agenda when it comes to them recommending you to a lender. Some colleges permit private lenders to utilize the name of the school. This isn’t always accurate. Schools may actually receive money from the lender of you end up taking out a loan. Make sure you grasp the subtleties of any loan prior to accepting it.
Don’t think that student loans should be depended on totally. Keep in mind that you need to put money aside and investigate grants and scholarships that may offer you some financial assistance. There are a number of good scholarship matching websites that can help you locate just the right grants and scholarships to suit your needs. Try not to delay and get out and get looking as quickly as possible.
Always double and triple check your financial aid form. This is something to be careful with because you may get less of a student loan if something is wrong. If you have lingering doubts about the accuracy of the information you have provided, seek the insight of your school’s financial aid representatives.
If you want to stretch out your student loans a little farther, get a meal plan which deals in terms of meals instead of dollar amounts. That way, you can pay a flat fee instead of being nickel and dimed.
So, whenever you may take a student loan, you now have more information to help guide you. Understanding the process can make a substantial difference in what you eventually owe upon graduating. Take this advice seriously and go into the loan process with as much knowledge as possible.