As you approach your last year of high school, you may notice offers for loans arrive in the mail. The offer of so much assistance toward your college aspirations are likely to seem like a dream come true. But, you need to tread carefully as you explore student loan options.
Learn about your loan’s grace period. Usually, there is a time period after you leave school before you must begin paying the loans. Knowing when this is over will allow you to know when to pay your payments on time so you don’t have a bunch of penalties to take care of.
Always know all the information pertinent to your loans. You must watch your balance, keep track of the lender, and monitor your repayment progress. These three things will affect future repayment plans and forgiveness options. This information is essential to creating a workable budget.
Stay in contact with your lender. Make sure they always know your address, phone number and email, all of which can change often during your college experience. Anytime you receive a phone call, email or paper letter from your lender, pay attention to it as soon as it is received. Take any requested actions as soon as you can. It can be quite costly if you miss anything.
Don’t worry about not being able to make a payment on your student loans if something unexpected like job loss has happened. Most lenders have options for letting you put off payments if you are able to document your current hardship. However, you may pay an increase in interest.
Remember private financing. Because public loans are so widely available, there’s a lot of competition. Private loans are available, though perhaps not in the volume of federal ones. Ask locally to see if such loans are available.
There are two main steps to paying off student loans. First, always make minimum payments each month. Pay extra on the loan with the highest interest rate. This will cut down on your liability over the long term.
Know how much time your grace period is between graduating and when you need to start paying back loans. For example, you must begin paying on a Stafford loan six months after you graduate. Others, like the Perkins Loan, allot you nine months. Other loans offer differing periods of time. Know what you have to pay when, and pay on time!
Choose the right payment option for you. Most loans have a 10-year repayment plan. You can consult other resources if this does not work for you. For instance, you can possibly spread your payments over a longer period of time, but you will have higher interest. You could also make payments based on your income. After 20 years, some loans are completely forgiven.
College is a time filled with lots of decisions, not the least of which is how much debt you take on. Borrowing too much or borrowing ones with high interest rates can create a major problem for you. Use the information located above to begin your future.