Most high school students begin getting student loan information long before needed. It might seem like a good thing to receive all those offers. However, There are things you must consider before deciding to take on such debt.
Be mindful of any grace period you have prior to having to repay your loan. This usually refers to the amount of time you are allowed after you graduate before repayments is required. Knowing this will give you a head start on getting your payments in on time and avoiding hefty penalties.
If you were laid off or are hit with a financial emergency, don’t worry about your inability to make a payment on your student loan. A lot of times, if you can provide proof of financial hardship, lenders will let you to delay your payments. Make sure you realize that going this route may result in increased interest.
Don’t forgo private loans for college. Public loans are great, but you might need more. Private loans – especially small ones – do not have as much competition, and this means that there is funding available that most other people don’t even know about. Explore any options within your community.
Select the payment choice that is best for you. A lot of student loans give you ten years to repay. You may discover another option that is more suitable for your situation. As an example, it may be possible to extend your payment time, but typically that’ll include a higher interest rate. You could also make payments based on your income. Some loans are forgiven after a 25-year period.
When it comes time to pay back your student loans, pay them off from higher interest rate to lowest. The highest rate loan should be paid first. This extra cash can boost the time it takes to repay your loans. There are no penalties for early payments.
Take a large amount of credit hours to maximize your loan. Though full-time student status requires 9-12 hours only, if you are able to take 15 or more, you will be able to finish your program faster. This helps you minimize the amount of your loans.
Stafford and Perkins loans are the most advantageous federal loans to get. Many students decide to go with one or both of them. These are great options because the government handles your interest while you are in school. Perkins loans have an interest rate of 5%. Subsidized Stafford loans offer interest rates no higher than 6.8 percent.
College requires lots of decision making, but taking out loans is perhaps the area of most concern to many. If you choose to borrow more than you actually need and getting loans at higher interest rates could create some pretty big issues. So, keep this information in mind as you enter college and embark on your future.