Many people are afraid of the process of getting a student loan. Usually these feelings stem from their lack of knowledge about them. To help reduce your fears, this article has some great suggestions to help you get started.
Keep in mind that there’s a grace period to follow before it’s time to pay a loan back. This is important for avoiding penalties that may result. Staying aware of when this period ends is the right way to make sure you never have late payments.
Don’t be scared if something happens that causes you to miss payments on your student loans. Many lenders will let you postpone payments if you have financial issues. However, this may negatively affect your interest rate.
A two-step process can be used to pay your student loans. First, make sure you are at least paying the minimum amount required on each loan. Next, pay extra on your loan with the largest interest rate instead of the one with the largest balance. In this way, the amount you pay as time passes will be kept at a minimum.
Check the grace period of your student loan. Stafford loans typically allow six months. Perkins loans have a nine month grace period. Other types can vary. Understand when your first payments will be due so that you can get on a schedule.
Get a payment option that works for you. Most student loans have a ten year plan for repayment. 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. The company may be willing to work with a portion of your net income. Sometimes, they are written off after many years.
Choose the payment option that is best suited to your needs. 10 years is the default repayment time period. If this isn’t right for you, you may be eligible for different options. Examples include lengthening the time it takes to repay the loan, but having a higher interest rate. You can also do income-based payments after you start earning money. It’s even the case that certain student loans are forgiven after a certain time period, typically 25 years.
Look to pay off loans based on their scheduled interest rate. Pay off the highest interest student loans first. Using your extra cash can help you get these student loans paid off quicker. Speeding up repayment will not penalize you.
Pay off the largest loan to reduce the total principal. The less principal you owe overall, the less interest you will end up paying. It is a good idea to pay down the biggest loans first. After you’ve paid your largest loan off in full, take the money that was previously needed for that payment and use it to pay off other loans that are next in line. If you make at least the minimum payment on all loans and large payments on the biggest loan, your student loan balances will disappear.
You may feel overburdened by your student loan payment on top of the bills you pay simply to survive. A good loan rewards program can make it all more manageable. For instance, check out SmarterBucks and LoanLink, both of which are offered by Upromise. These are similar to other programs that allow you to earn cash back. You can use this money to reduce your loan.
Get many credit hours each semester. Sure a full time status might mean 12 credits, but if you can take 15 or 18 you’ll graduate all the quicker. This will help in reducing your loan significantly.
It is very important that you correctly fill out all student loan documents to ensure the timely process of them. Your application may be delayed or even denied if you give incorrect or incomplete information.
Two superior Federal loans available are the Perkins loan and the Stafford loan. They tend to be affordable and entail the least risk. This is a great deal that you may want to consider. The Perkins loan interest rate is 5%. The Stafford loans are a bit higher but, no greater than 7%.
Keep in mind that a school may have something in mind when they recommend that you get money from a certain place. Some colleges permit private lenders to utilize the name of the school. Such tactics are often misleading. The school may receive some sort of payment if you agree to go with a certain lender. Understand every aspect of your loan right off the bat.
Student loans should not be something that causes you undue anxiety. Using these tips, you can successfully deal with your student loans. Use the advice from this article to find the right loan for you.