Most people must get student loans in order to pay for their college education. Unfortunately, too many people take out student loans, but without fully understanding what that entails and what their obligations are. Keep reading to learn more about the process of taking out student loans.
Keep in mind that there’s a grace period to follow before it’s time to pay a loan back. This is the amount of time you are allowed after graduation before you loan becomes due. When you stay on top of this, this will help you to maintain better financial control so that you don’t incur any extra fees or bad credit marks.
Always figure out what the details of the loans you have out are. Know your loan balance, your lender and the repayment plan on each loan. These are three very important factors. To devise a good budget, you must factor all this in.
Stay in contact with all lenders. 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. 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. It can be quite costly if you miss anything.
Don’t fret when extenuating circumstances prevent you from making a payment. Many lenders give you a grace period if you are able to prove that you are having difficulties. Just know that the interest rates may rise.
If you are in the position to pay down your student loans, make the high interest loans your first priority. Do not simply pay off the loan that has the smallest amount remaining.
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. The period should be six months for Stafford loans. Perkins loans give you nine months. Other kinds of loans may have other grace periods. Know exactly the date you have to start making payments, and never be late.
Pick a payment plan that suits your particular needs. Many loans offer payment over a decade. If this isn’t working for you, there could be a variety of other options. You may need to extend the time you have to repay the loan. This often comes with an increase in interest. You can also do income-based payments after you start earning money. The balances on student loans usually are forgiven once 25 years have elapsed.
The prospect of having to pay a student loan every month can be hard for people that are on hard budget already. Rewards programs can help. LoanLink and Upromise are two of these great programs. This can help you get money back to apply against your loan.
Stafford and Perkins loans are the most advantageous federal loans to get. These are both safe and affordable. These are great options because the government handles your interest while you are in school. Perkins loan interest rates are at 5 percent. The Stafford loans are a bit higher but, no greater than 7%.
Rid your mind of any thought that defaulting on a student loan is going to wipe the debt away. The federal government will go after that money in many ways. For instance, it has the power to seize tax refunds as well as Social Security payments. The government may also take 15 percent of your income. Many times you will put yourself in an even worse situation.
Be sure to double check all forms that you fill out. This is key, as it can determine how much loan money you can receive. If you have any questions about filling out the application, talk to experts on financial aid from your college.
Student loans are becoming a very common part of the college experience. Responsible borrowing is critical to get the most from your scholastic experience. Use the solid tips that you learned here to simplify the process of securing a student loan.