To many people, a student loan is a necessary debt required to finance a college education. However, many borrowers get them without knowing how they’ll affect them in the future. Read on to learn how you can avoid being taken advantage of when seeking financing for your education.
Know how much time you have in your grace period from the time you leave school until you must begin paying back your loans. Stafford loans offer a period of six months. Perkins loans give you nine months. Make sure to contact your loan provider to determine the grace period. This is important to avoid late penalties on loans.
Which payment option is your best bet? You will most likely be given 10 years to pay back a student loan. If you can’t make this work for your situation, check out other options if you can. For instance, it may be possible to extend the loan’s term; however, that will result in a higher interest rate. You might even only have to pay a certain percentage of what you earn once you finally do start making money. Some student loan balances are forgiven after twenty five years has passed.
Choose payment options that best serve you. Most loans have a 10-year repayment plan. It is possible to make other payment arrangements. For example, you may be able to take longer to pay; however, your interest will be higher. You can also do income-based payments after you start earning money. Sometimes student loans are written off after an extended period of time.
For those on a budget already stretched to the max, the idea of a student loan can be scary. There are loan rewards programs that can help with payments. LoanLink and Upromise are two of these great programs. 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.
To expedite the process of a student loan, make sure the application is filled out accurately. This will give the loan provider accurate information to leverage off of.
The Perkins Loan and the Stafford Loan are both well known in college circles. They are the safest and most economical. They are favorable due to the fact that your interest is paid by the government while you are actually in school. The interest for a Perkins loan holds at five percent. On subsidized Stafford loans it is fixed at a rate no greater than 6.8%.
PLUS loans are a type of loan option for parents and graduate students. They have an interest rate that is not more than 8.5 percent. Although this rate is higher than that of the Perkins and Stafford loans, it is lower than the rates charged for private loans. This is the best option for mature students.
Get rid of thinking that defaulting on a loan means freedom. There are many tools in the federal government’s arsenal for getting the funds back from you. For instance, you might see money withheld from Social Security payments or even your taxes. The government even has the right to take up to fifteen percent of what it deems your disposable income. Most of the time, not paying your student loans will cost you more than just making the payments.
Use caution when getting a private loan. It may be challenging to find the terms. You may not know exactly what you’re signing until later. Then, you may not be able to do much about the situation. Learn as much as possible. If you receive a good offer, go to other lenders and see if they’ll beat that offer.
Do not rely on student loans in order to fund your entire education. Remember to save money and also look into scholarships and grants that may help you. You may find some that will match your other funding sources. Start searching right away to be prepared.
To extend to value of your loan money, try to get meal plans that do not deduct dollar amounts, but rather include whole meals. This way, you won’t be paying for each individual item; everything will be included for your prepaid flat fee.
Talk to your lender if you want to gain insight on your loan. You have to understand everything about the loan you owe and how you need to pay it back. He or she may have useful information for you.
Always know your repayment options. If you anticipate financial constraints immediately following graduation, think about a loan with graduated payments. Your initial payments tend to be smaller and slowly rise as you hopefully earn more.
Add to the money you get from a student loan by looking for an on-campus job. You can have some extra spending money along with being able to repay your loan.
Many people cannot afford to pay for their education without student loans. The key is learning everything you can about student loans before you need them. Follow the advice presented here to simplify the student loan process.