A high school student can normally expect to begin receiving offers for student loans. Initially, these loan offers may seem like the answer. But, you should think over a few things before you get into this kind of a debt.
Learn about your loan’s grace period. The grace period is the time you have between graduation and the start of repayment. Knowing this will give you a head start on getting your payments in on time and avoiding hefty penalties.
Stay in contact with your lender. Always let them know when you change your phone number, mailing address or email address, and these things can happen often when you are in college. It is also important to open and thoroughly read any correspondence you receive from your lender, whether it is through traditional or electronic mail. Take action right away. Failure to miss anything can cost you a lot of money.
Remain calm if you discover that can’t make your payments due to an unforeseen circumstance. A lot of the time a lender will allow a payment to be postponed if you show them you’re having a hard time. However, you should know that doing this could cause your interest rates to increase.
Do not overlook private sources of funds for college. Because public loans are so widely available, there’s a lot of competition. These private loans are not tapped into as much, which means they contain smaller increments of money due to lack of awareness and size. Ask locally to see if such loans are available.
Don’t let setbacks throw you into a tizzy. There is always something that pops up in a persons life that causes them to divert money elsewhere. Keep in mind that forbearance and deferment options do exist with most loans. Keep in mind that interest often continues accruing, so do your best to at least make interest payments to keep from having a larger balance.
If you wish to repay student loans in advance, deal with the ones with the highest interest rates first. If you try to pay off the ones with the lowest balances first, you may pay more interest that you have to.
Choose the right payment option for you. Many student loans offer 10 year payment plans. There are other ways to go if this is not right for you. For example, you might take a long time to pay but then you’ll have to pay a lot more in interest. You can also possibly arrange a deal where you pay a certain percentage of your overall post-graduation income. After 20 years or so, some balances are forgiven.
When repaying student loan obligations, prioritize them by interest rate. Go after high interest rates before anything else. Using your extra cash can help you get these student loans paid off quicker. Paying quicker than expected won’t penalize you in any way.
Understanding loans is critical to the college experience. Choosing to borrow too much money, along with a higher interest rate can quickly add up to a big problem. Keep this information in mind when you decide to go to college.…