Getting the student loans necessary to finance your education can seem like an incredibly daunting task. You have also probably heard horror stories from those whose student debt has resulted in near poverty during the post-graduation period. But, by spending some time learning about the process, you can spare yourself the agony and make smart borrowing decisions.
Make sure you keep track of your loans. You should know who the lender is, what the balance is, and what its repayment options are. If you are missing this information, you can contact your lender or check the NSLDL website. If you have private loans that lack records, contact your school.
Watch for the grace period which is available to you before you are required to repay the loan. This is generally the period after graduation when the payments are due. Having this knowledge of when your payments are scheduled to begin will avoid incurring any penalties.
Make sure you are in regular contact with the lender. Make sure they always know your address, phone number and email, all of which can change often during your college experience. It is also important to open and thoroughly read any correspondence you receive from your lender, whether it is through traditional or electronic mail. If any requests are made or important stipulations are shared with you, act on them right away. You can end up spending more money than necessary if you miss anything.
There are two steps to approach the process of paying off student loans you have taken out. The first thing you need to do is be certain that you are making the minimum required monthly payment on each loan. After that, pay extra money to the next highest interest rate loan. This will keep to a minimum the total sum of money you utilize over the long run.
If at all possible, sock away extra money toward the principal amount. The key is to notify your lender that the additional money must be applied toward the principal. Otherwise, the money will be applied to your future interest payments. Over time, paying down the principal will lower your interest payments.
It can be hard to figure out how to get the money for school. A balance of grants, loans and work is usually necessary. When you work to put yourself through school, it is important not to overdo it and negatively affect your performance. Although the specter of paying back student loans may be daunting, it is usually better to borrow a little more and work a little less so you can focus on your school work.
Perkins and Stafford are some of the best federal student loans. They tend to be affordable and entail the least risk. They are a great deal because the government pays the interest on them during the entirety of your education. There’s a five percent interest rate on Perkins loans. Subsidized Stafford loans offer interest rates no higher than 6.8 percent.
Keep in mind that your school could have other motivations when they recommend certain lenders. Some schools allow private lenders to use the school name. This is oftentimes quite misleading to students and parents. The school can get a portion of this payment. Know the terms and conditions of any loan you are considering before you sign anything.
You may feel intimidated by the prospect of arranging the student loans you need for your schooling to be possible. However, you must not let the bad experiences of others cloud your ability to move forward. By educating yourself about the various types of student loans available, you will be able to make sound choices that will serve you well for the coming years.