Student loan offers often arrive in the mail long before you finish high school. While you may find that exciting, beware. You must consider many things before signing up for debt later on.
Make it a point to be aware of all the important facets of your student loans. You need to know how much you owe, your repayment status and which institutions are holding your loans. These details affect your repayment options. This information is essential to creating a workable budget.
Never panic when you hit a bump in the road when repaying loans. Life problems such as unemployment and health complications are bound to happen. There are forbearance and deferments available for such hardships. Just remember that interest will continue to build in many of these options, so try to at least make payments on the interest to prevent your balance from growing.
Focus initially on the high interest loans. You may owe more money if you don’t prioritize.
Know how much time your grace period is between graduating and when you need to start paying back loans. Stafford loans provide a six month grace period. If you have Perkins loans, you will have 9 months. The time periods for other student loans vary as well. Know what you have to pay when, and pay on time!
Choose your payment option wisely. Many of these loans offer a ten year repayment period. If this is not ideal for you, look into other possibilities. For example, you might have to take a while to pay a loan back, but that will make your interest rates go up. Also, paying a percent of your wages, once you start making money, may be something you can do. The balances on some student loans have an expiration date at 25 years.
Pay off student loans in interest-descending order. The loan with the largest interest rate should be your first priority. Using the extra money you have can get these things paid off quicker later on. There are no penalties for paying off a loan faster.
For those on a budget already stretched to the max, the idea of a student loan can be scary. However, loans that offer a rewards program can soften the blow. Two such programs are SmarterBucks and LoanLink. This can help you get money back to apply against your loan.
You can stretch your dollars further for your student loans if you make it a point to take the most credit hours as you can each semester. You may be able to scrape by with 12 hours, but try to at least carry 15 per semester. If possible, go for 18. This helps to lower your loan amounts.
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. You must then make sure to make every single payment. If you do not do so, then whoever co-signed your debt will be held liable.
College comes with many decisions, but few are as important as the debt that you accrue. If you borrow a lot of money at a high rate of interest, you will have a debt burden for a long time. Keep these tips in mind when going to college.