Most students seem to end up with some student loan debt by the time they have finished their college or university studies. The way to exit school and still be in good financial shape is to know everything you can about how student loans work. Read on and learn more.
Be mindful of any grace period you have prior to having to repay your loan. This usually refers to the amount of time you are allowed after you graduate before repayments is required. Knowing this will give you a head start on getting your payments in on time and avoiding hefty penalties.
Be sure you know all details of all loans. You need to stay on top of your balances, your lenders and the repayment status in which you find yourself at any given time. These details will significantly influence the repayment options available to you, as well as the loan forgiveness terms you will face. Budget wisely with all this data.
If you are in the position to pay off student loans early and inclined to do so, make sure you begin with the loans that carry the highest rate of interest. Basing payments on the highest and lowest amounts can make you end up paying more money later.
Pick the payment option that works best for you. Many student loans offer 10-year payment plans. If you don’t think that is feasible, you should check for alternatives. For example, you may be able to take longer to pay; however, your interest will be higher. You may also have the option of paying a certain percentage of your future earnings. The balances on some student loans have an expiration date at 25 years.
The thought of paying on student loans can be daunting. There are loan rewards programs that can help with payments. Two such programs are SmarterBucks and LoanLink. These are similar to cash back programs in which you earn rewards for each dollar you spend, and you can apply those rewards toward 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. Generally, being a full-time student is seen as 9 to 12 hours per semester, but if you can squeeze in between 15 or 18, then you should be able to graduate sooner. This will assist you minimizing your loan amounts.
If you have poor credit and are looking for a private loan, you will need a co-signer. It is vital that you stay current on your payments. If you don’t do this, your co-signer is liable for those debts.
One form of loan that may be helpful to grad students is the PLUS loan. Their interest rate doesn’t exceed 8.5%. This is a higher rate than Stafford or Perkins loans, however it’s better than most private loans. Because of this, you should get this option only if you’re an established and mature student.
Student loans are something that you will eventually have to tap into. This is the only way most people can afford a college education currently. Now that you are armed with some useful tips to mitigate the damage student debt does to your financial future, you should feel much more confident.