Most high school students begin getting student loan information long before needed. While you may find that exciting, beware. In the end, you have to know what you’re doing before you pick any one loan.
Do know that you are probably going to have a post-graduation grace period from your student loans before you are required to start making payments back. This is the amount of time you have before the lender will ask that your payments need to start. Being aware of this information allows you to make your payments in a timely manner so that you do not incur costly penalties.
Know the specifics about your loan. This will help you with your balance and repayment status. These things matter when it comes to loan forgiveness and repayment. Use this information to create a budget.
Stay in contact with your lender. Notify them if there are any changes to your address, phone number, or email as often happens during and after college. Be certain that you immediately review anything you get from your lender, be it an electronic notice or paper mail. You should take all actions immediately. Missing an important piece of mail can end up costing a great deal of money.
Don’t be driven to fear when you get caught in a snag in your loan repayments. You could lose a job or become ill. Realize that there are ways to postpone making payments to the loan, or other ways that can help lower the payments in the short term. The interest will grow if you do this though.
Implement a two-step system to repay the student loans. Always pay the minimum balance due. After this, you will want to pay anything additional to the loan with the highest interest. This will reduce your spending in the future.
Know how much time your grace period is between graduating and when you need to start paying back loans. Six months is usually the length for Stafford loans. For Perkins loans, the grace period is nine months. Different loans will be different. Know what you have to pay when, and pay on time!
Select the payment option best for your particular needs. Many student loans come with a ten year length of time for repayment. If you don’t think that is right for you, look into other options. You may need to extend the time you have to repay the loan. This often comes with an increase in interest. You might also be able to pay a percentage of your income once you begin making money. The balance of some student loans is forgiven after 25 years.
College comes with a lot of choices involved, but most aren’t as important as what debt you take on. Borrowing too much or borrowing ones with high interest rates can create a major problem for you. So, remember what you have learned from above as you head off to college and start your future.