Some people have to go through the process of getting a student loan in order to attend the school they desire. Naturally, unscrupulous, predatory lenders are in abundance to take advantage of hopeful students. Read the article below to learn more about student loans.
Learn about your loan’s grace period. This generally means the period after you graduate where the payments will become due. You can get a head start in making timely payments by knowing what your grace period is.
Start your student loan search by looking at the safest options first. These are generally the federal loans. They are immune to your credit rating, and their interest rates don’t fluctuate. These loans also carry some borrower protection. This is in place in case of financial issues or unemployment following your graduation from college.
Do not hesitate to “shop” before taking out a student loan. Just as you would in other areas of life, shopping will help you find the best deal. Some lenders charge a ridiculous interest rate, while others are much more fair. Shop around and compare rates to get the best deal.
If you have the ability to pay more than what you owe on your loans, try to get those with the highest interest taken care of first. You may owe more money if you don’t prioritize.
When deciding how much money to borrow in the form of student loans, try to determine the minimum amount needed to get by for the semesters at issue. Too many students make the mistake of borrowing the maximum amount possible and living the high life while in school. By avoiding this temptation, you will have to live frugally now, but will be much better off in the years to come when you are not repaying that money.
The idea of paying off a student loan every month can seem daunting for a recent grad on a tight budget. There are loan rewards programs that can help with payments. Look into something called SmarterBucks or LoanLink and see what you think. These are similar to programs that give cash back. When you spend, you get rewards that you can use on loans.
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.
The best loans that are federal would be the Perkins or the Stafford loans. These two are considered the safest and most affordable. 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. The subsidized Stafford loan has an interest rate that does not exceed 6.8%.
If you have yet to secure a job in your chosen industry, consider options that directly reduce the amount you owe on your loans. For example, volunteering for the AmeriCorps program can earn as much as $5,500 for a full year of service. Serving as a teacher in an underserved area, or in the military, can also knock off a portion of your debt.
Do not think that defaulting will relieve you from your student loan debts. The federal government will go after that money in many ways. They can take money off your tax refund, for example. In addition, they can garnish your wages and take a significant portion of your take home pay. Most of the time, not paying your student loans will cost you more than just making the payments.
If you take out loans from multiple lenders, know the terms of each one. Some loans, such as federal Perkins loans, have a nine-month grace period. Others are less generous, such as the six-month grace period that comes with Family Education and Stafford loans. You must also consider the dates on which each loan was taken out, as this determines the beginning of your grace period.
Stretch your student loan money by minimizing your living expenses. Find a place to live that is close to campus and has good public transportation access. Walk and bike as much as possible to save money. Cook for yourself, purchase used textbooks and otherwise pinch pennies. When you look back on your college days, you will feel very resourceful.
If you want to see your student loan dollars go farther, cook your meals at home with your roommates and friends instead of going out. You’ll spend less on the food, and a lot less on the alcohol or soft drinks that you buy at the store instead of ordering from a server.
It is important that you pay close attention to all of the information that is provided on student loan applications. Overlooking something can cause errors and/or delay the processing of your loan. Even if something looks like it is not very important, it is still important for you to read it in full.
Stay in touch with the lender. This will keep you informed about the loan and aware of any stipulations to your payment plan. They may even have some great tips on repayment.
If you are the forgetful type and are worried that you might miss a payment or not remember it until it is past due, you should sign up for direct pay. That way your payment will be automatically deducted from your checking account each month and you can be sure you will never have a late payment.
To make the student loan process go as quickly as possible, make sure that you have all of your information in hand before you start filling out your paperwork. That way you don’t have to stop and go looking for some bit of information, making the process take longer. Making this decision eases the entire situation.
