Student loan nightmare stories are becoming all too common. You may wonder how people get is such a huge financial mess. It’s quite easy actually. Just keep signing on that line without understanding the terms you are agreeing to and it will add up to one big expensive mistake. So keep these tips in mind before you sign.
Know your grace periods so you don’t miss your first student loan payments after graduating college. Stafford loans typically give you six months before starting payments, but Perkins loans might go nine. Private loans are going to have repayment grace periods of their own choosing, so read the fine print for each particular loan.
Attend to your private college financing in a timely manner. Public loans are great, but you might need more. Private loans have a lot of advantages that public loans do not. Look at these loans at a local college since they can cover one semester worth of books.
Focus on paying off student loans with high interest rates. Repaying based on balance size could actually cause you to pay more in interest than you otherwise would have.
If you don’t have a lot of “extra” money, student loans can really make life difficult for you. You can make things a bit easier with help from loan rewards programs. For instance, look into the Upromise programs called SmarterBucks and LoanLink. These work like cash back programs, and the money you spend earns rewards that can be applied toward your loan.
To reduce the amount of your student loans, work as many hours as you can during your last year of high school and the summer before college. The more money you have to give the college in cash, the less you have to finance. This means less loan expense later on.
Fill your application out accurately to get your loan as soon as possible. If you give information that is incomplete or incorrect, it can delay the processing, which means that you could end up unable to begin a semester, putting you half a year behind.
It is best to get federal student loans because they offer better interest rates. Additionally, the interest rates are fixed regardless of your credit rating or other considerations. Additionally, federal student loans have guaranteed protections built in. This is helpful in the event you become unemployed or encounter other difficulties after you graduate from college.
Try to make your student loan payments on time. If you miss your payments, you can face harsh financial penalties. Some of these can be very high, especially if your lender is dealing with the loans through a collection agency. Keep in mind that bankruptcy won’t make your student loans go away.
Starting to pay off your student loans while you are still in school can add up to significant savings. Even small payments will reduce the amount of accrued interest, meaning a smaller amount will be applied to your loan upon graduation. Keep this in mind every time you find yourself with a few extra bucks in your pocket.
Remember your school could have some motivation for recommending certain lenders to you. There are schools that allow certain lenders to utilize the school’s name. This can mislead you if you are not careful. The school might get a payment or reward if a student signs with certain lenders. Know the terms and conditions of any loan you are considering before you sign anything.
Making educated decisions about student loans is the best way to avoid financial disaster. It can also keep you from making a costly mistake that will follow you for decades. So remember the tips from above, don’t be afraid to ask questions and always understand what you are are signing up for.