Student Loans: What Every Student Should Know

Student loans are often necessary but, can become very overwhelming if you do not understand all of the terms involved. Educate yourself on the process before you make any firm commitments. Keep reading for the information you need.

TIP! Keep in close touch with your lender. Make sure your records are updated, such as your phone number and address.

Find out when you must begin repayments. Usually, there is a time period after you leave school before you must begin paying the loans. Knowing this allows you to make sure your payments are made on time so you can avoid penalties.

Make sure you are in regular contact with the lender. When you make changes to your address or phone number, make sure you let them know. Do not put off reading mail that arrives from the lender, either. Do whatever you must as quickly as you can. Missing an important piece of mail can end up costing a great deal of money.

TIP! You don’t need to worry if you cannot pay for your student loans because you are unemployed. Most lenders have options for letting you put off payments if you are able to document your current hardship.

If you’re having trouble repaying loans, don’t panic. Anything can come up and interfere with your ability to pay, such as a medical emergency or getting laid off from work. Do be aware of your deferment and forbearance options. However, the interest will build during the time you are not making payments.

If you are thinking about paying off any of your student loans ahead of schedule, you should focus on the ones that have the highest interest. If you get your payments made on the loans that have the lowest or the highest, it can cost you extra in the end.

Grace Period

How long is your grace period between graduation and having to start paying back your loan? Stafford loans offer a period of six months. Perkins loans have a nine month grace period. Different loans will be different. Make certain you are aware of when your grace periods are over so that you are never late.

TIP! Think about what payment option works for you. Many of these loans offer a ten year repayment period.

For those on a budget already stretched to the max, the idea of a student loan can be scary. A rewards program may help things. Look into something called SmarterBucks or LoanLink and see what you think. These work like cash back programs, and the money you spend earns rewards that can be applied toward your loan.

To make sure your student loan application goes smoothly, make sure the information you include is accurate. If you make any errors on the paperwork, this can cause a hold up in your getting the loan, which could cause you to be unable to pay for school when the semester starts.

If your credit is sub-par, you might need a co-signer for private student loans. Make every payment on time. When someone co-signs, they are responsible too.

If you are in graduate school, a PLUS loan may be an option. Their interest rate does not exceed 8.5%. These loans give you a better bang for your buck. This loan option is better for more established students.

TIP! Monthly student loans can seen intimidating for people on tight budgets already. That can be reduced with loan rewards programs.

Some schools have reasons that they may try to motivate you to go toward one particular lender to get a student loan. There are institutions that actually allow the use of their name by specific lenders. This can lead to misunderstandings. The school might get a payment or reward if a student signs with certain lenders. Understand the terms of the loan before you sign the papers.

Forget about defaulting on student loans as a way to escape the problem. The government will come after you. Claiming part of your income tax return or your Social Security payments are only two examples. In addition, they can also collect up to 15 percent of other income you have. This will put you in a very bad position.

TIP! You can stretch your dollars further for your student loans if you make it a point to take the most credit hours as you can 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.

Private student loans should be considered carefully before you sign. It may be challenging to find the terms. If you sign before you understand, you may be signing up for something you don’t want. Then, it will be very hard to free yourself from them. Learn all that you can prior to signing. If you receive an offer that’s great, see if other lenders can beat or match it.

Stay in contact with the bank who loaned you the money. You can learn about changes or issues that way. Your lender should also provide some valuable repayments tips to you.

TIP! A lot of people apply for a student loan and sign things without having knowledge of what they’re doing. If something is unclear, get clarification before you sign anything.

You have a lot of information now on student loans to digest. Your decisions can benefit you or haunt you forever. Learn about all of your borrowing options and pick the best deal for your situation.