Even high school students will start receiving student loan offers for college. It might seem like it’s a blessing that you are receiving so many offers to help towards your higher education. But, you should think over a few things before you get into this kind of a debt.
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.
Grace Period
Be mindful of the exact length of your grace period between graduation and having to start loan repayments. Stafford loans have a grace period of six months. For Perkins loans, you’ll have a nine month grace period. Make sure to contact your loan provider to determine the grace period. Be sure you know exactly when you will be expected to begin paying, and don’t be late!
Pick a payment option which best fits your requirements. A lot of student loans give you ten years to pay them back. If this does not appear to be feasible, you can search for alternative options. You could choose a higher interest rate if you need more time to pay. Therefore, you should pay it once you make money. Sometimes student loans are written off after an extended period of time.
Prioritize your loan repayment schedule by interest rate. Pay off the highest interest rate loan first. This extra cash can boost the time it takes to repay your loans. There are no penalties for paying off a loan faster.
You should try to pay off the largest loans first. If your principal is ower, you will save interest. Stay focused on paying the bigger loans first. Once it is gone, you can focus on smaller loans. By keeping all current and paying the largest down totally first, you will more quickly rid yourself of debt.
To get the most out of your student loan dollars, take as many credit hours as possible. Sure a full time status might mean 12 credits, but if you can take 15 or 18 you’ll graduate all the quicker. The will assist you in reducing the size of your loans.
Some people apply for loans and sign the papers without understanding the terms. Always ask any questions that come up or if you need anything clarified. A lender may wind up with more money that necessary if there is a term that you don’t understand.
PLUS loans are available if you are a graduate student or the parent of one. Their interest rate doesn’t exceed 8.5%. While it may be more than other loans, it is cheaper than you will get through a private lender. This may be a suitable option for your situation.
College comes with a lot of choices involved, but most aren’t as important as what debt you take on. Borrowing large amounts of money at high interest rates can lead to big problems. Keep in mind all that you read here as you prepare for both college and the future.
