Do you know someone who has a student loans crushing them? Unfortunately, students are often more worried about their courses than their financial future. This article has the tips you need to make a sound decision.
Make sure you stay in close contact with your lenders. Make sure they always know your address, phone number and email, all of which can change often during your college experience. Be certain you always open mail that comes from your lender, and that includes e-mail. Make sure that you take all actions quickly. Neglecting something may cost you a fortune.
Do not panic if a job loss or other emergency makes paying your student loan difficult. Most lenders can work with you if you lose your job. Just keep in mind that doing this might cause the lender to raise the interest rate on your loan.
Try not to panic if you can’t meet the terms of a student loan. Unemployment or a health problem can happen to you from time to time. Keep in mind that forbearance and deferment options do exist with most loans. The interest will grow if you do this though.
Work hard to make certain that you get your loans taken care of quickly. Make sure you pay the minimum amount due each month. If you have money left over, apply that to the loan that has the highest interest associated with it. This helps lower the amount of costs over the course of the loan.
If you plan to prepay your loans, try to pay those with the highest interest rates first. You definitely want to pay down the ones with the highest interest rate, because taking care of the lower ones could cause you to end up paying more money.
Check the grace period of your student loan. For Stafford loans, it should give you about six months. Perkins loans are about 9 months. The time periods for other student loans vary as well. Know what you have to pay when, and pay on time!
Pay off big loans with higher interest rates first. It should always be a top priority to prevent the accrual of additional interest charges. Pay off larger loans first. When you pay off a big loan, apply the payment to the next biggest one. When you apply the biggest payment to your biggest loan and make minimum payments on the other small loans, you have have a system in paying of your student debt.
To make the most of a loan, take the top amount of credits that 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 helps you minimize the amount of your loans.
Fill in all of the spaces on your application, otherwise, you may run into delays. Giving incomplete or incorrect information can delay its processing.
Stafford and Perkins are the best loan options. They are the safest and most economical. These are good loans because the government pays the interest while you are still in school. There’s a five percent interest rate on Perkins loans. On Stafford loans that are subsidized, the loan will be fixed and no larger than 6.8%.
If you don’t have good credit, and you are applying for a student loan from a private lender, you will need a co-signer. Keep your payments up to date. If not, the cosigner is accountable for your debt.
A PLUS loan is a loan that can be secured by grad students as well as their parents. The interest rate won’t be any larger than 8.5%. Although it is higher than Perkins and Stafford Loans, you still get a much better rate than one that is private. These loans are much better suited to an older student that is at graduate school or is close to graduating.
You aren’t free from your debt if you default on your loans. The government has several collection tools at its disposal. For example, they can claim a little of a tax return or even a Social Security payment. The government may also take 15 percent of your income. Most of the time, not paying your student loans will cost you more than just making the payments.
Student debt is often crippling upon graduation. Therefore, you should have a good idea of what you are doing. Use what you’ve just learned to take advantage of student loans without negatively affecting your future.