You may start getting student loan offers in your mailbox while you are still in high school. Initially, these loan offers may seem like the answer. However, you should think about the following tips before you get into a student loan.
Know all of your loan's details. You need to know how much you owe, your repayment status and which institutions are holding your loans. This helps when it comes to payment plans and forgiveness options. It is your responsibility to add this information into your budget plans.
Do not forget about private financing. Student loans are known to be plentiful, but there is so much competition involved. Private loans are easy to get and there are many options. Investigate around your community for private loans; even a small one can cover room and board for a term or two.
If you have trouble repaying your loan, try and keep a clear head. You could lose a job or become ill. Do know that you have options like deferments and forbearance available in most loans. Just remember that interest is always growing, so making interest-only payments will at least keep your balance from rising higher.
When paying off your loans, go about it in a certain way. First, ensure you meet the minimum monthly payments on each separate loan. Then, those with the greatest interest should have any excess funds funneled towards them. This will make things cheaper for you over time.
Pay off the loan with higher interest rates first so you can shrink the amount of principal you owe faster. As your principal declines, so will your interest. Hone in on large loans. Once you pay off one big loan, transfer the payments amounts to the loans with the next highest balances. When you make minimum payments on each loan and apply extra money to your biggest loan, you get rid of the debts from your student loans systematically.
The concept of making payments on student loans each month can be frightening when money is tight. A good loan rewards program can make it all more manageable. Places to check out are SmarterBucks and LoanLink which are programs available from Upromise. The are akin to cash back incentives, and the money spent works like a reward you can use toward your loan balance.
Get the maximum bang for the buck on your student loans by taking as many credits each semester as you can. While 9 to 12 hours each semester is full time, you may be able to get 15 to 18 which can help you to graduate faster. This will reduce the amount of loans you must take.
Be sure to read and understand the terms of any student loans you are considering. Always ask any questions that come up or if you need anything clarified. This is one way that lenders use to get more than they should.
Fill your application out accurately to get your loan as soon as possible. If you give wrong or incomplete information, it can slow down processing and you may not be able to start when you planned. This can put you behind by a year.
The simplest loans to obtain are the Stafford and Perkins. Generally, the payback is affordable and reasonable. These are great options because the government handles your interest while you are in school. The Perkins loan carries an interest rate of 5%. Subsidized Stafford loans offer interest rates no higher than 6.8 percent.
If you try to get private loans with poor credit, you are sure to need a co-signer. It is critical that you make all your payments in a timely manner. Otherwise, the other party must do so in order to maintain their good credit.
PLUS loans are student loans that are available to graduate students and to parents. They cap their interest rate at 8.5 percent. This costs more than Perkins or Stafford loans, but it will be a better rate than a private loan. This may be a suitable option for your situation.
Financing your college education may be one of the most important decisions you will make. If you do not pay attention, you may end up causing yourself great financial hardship in the future. Keep these tips in mind when going to college.