Some people find it necessary to rely on student loans in order to attend college. Many people dread the process, though, especially those that lack knowledge about them. Luckily, the advice below will help you with the process.
Verify the length of your grace period before repayment of your loan is due. This generally means the period after you graduate where the payments will become due. Knowing when this is over will allow you to know when to pay your payments on time so you don’t have a bunch of penalties to take care of.
Speak with your lender often. Always let them know when you change your phone number, mailing address or email address, and these things can happen often when you are in college. Anytime you receive a phone call, email or paper letter from your lender, pay attention to it as soon as it is received. Make sure that you take all actions quickly. You can end up spending more money than necessary if you miss anything.
Don’t worry if you can’t pay a student loan off because you don’t have a job or something bad has happened to you. Usually, many lenders let you postpone payments if you are able to prove hardship. You should know that it can boost your interest rates, though.
Do not overlook private sources of funds for college. While public student loans are widely available, there is much demand and competition for them. 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. Ask locally to see if such loans are available.
If an issue arises, don’t worry. Anything can come up and interfere with your ability to pay, such as a medical emergency or getting laid off from work. Make sure you are aware of the specific terms that apply to such circumstances, such as deferments or forbearance, which are part of most loan programs. Interest will build up, so try to pay at least the interest.
When paying off your loans, go about it in a certain way. First you need to be sure that you know what the minimum payments for the loans will be each month. Pay extra on the loan with the highest interest rate. This will keep your total expenditures to a minimum.
The Stafford and Perkins loans are good federal loans. They are both reliable, safe and affordable. This is a great deal that you may want to consider. The interest rate on a Perkins loan is 5 percent. The Stafford loans which are subsidized come at a fixed rate which is not more than 6.8%.
Be aware that you may need a co-signer for a private loan if your credit isn’t good. Making payment on time is very important. If you don’t, the person who co-signed is equally responsible for your debt.
PLUS loans are available if you are a graduate student or the parent of one. They have an interest rate that is not more than 8.5 percent. Although it is higher than Perkins and Stafford Loans, you still get a much better rate than one that is private. Therefore, this type of loan is a great option for more established and mature students.
Your school could have an ulterior motive for recommending you pursue your loan through particular lenders. Schools sometimes let private lenders use the name of the school. This is oftentimes quite misleading to students and parents. A school might get a kickback for you signing up for that lender. Make sure you know all the details of any loan before signing on the dotted line.
Defaulting on your loans is not an easy way out. The government will often still get its money back anyway. For instance, it could freeze your bank account. It can also claim 15 percent of your disposable income. In most cases, you’ll end up in a worse position than before.
As previously discussed, many people need student loans when pursuing advanced education. Now that you’ve read this article, you’re aware of what makes a good student loan and what doesn’t. Utilize this advice when paying back your loan.