Are you about to embark on your college career, but worry the costs will be unmanageable? If so, you are like countless other prospective scholars who will need to secure student loans of one type or another. Keep reading to learn how to get the right terms so that your financial future remains promising.
When it comes to student loans, make sure you only borrow what you need. Consider the amount you need by taking a look at your total expenses. Factor in items like the cost of living, the cost of college, your financial aid awards, your family’s contributions, etc. You’re not required to accept a loan’s entire amount.
Don’t panic if you have a slight hiccup when paying back your loans. Many issues can arise while paying for your loans. There are options like forbearance and deferments for most loans. Just remember that interest keeps accruing in many forms, so try to at least make payments on the interest to keep the balances from increasing.
If you choose to pay off your student loans faster than scheduled, make sure that your extra amount is actually being applied to the principal. Many lenders will assume extra amounts are just to be applied to future payments. Contact them to make sure that the actual principal is being reduced so that you accrue less interest over time.
Be careful when consolidating loans together. The total interest rate might not warrant the simplicity of one payment. Also, never consolidate public student loans into a private loan. You will lose very generous repayment and emergency options afforded to you by law and be at the mercy of the private contract.
Before accepting the loan that is offered to you, make sure that you need all of it. If you have savings, family help, scholarships and other types of financial help, there is a chance you will only need a portion of that. Do not borrow any more than necessary since it will make it harder to pay it back.
To minimize your student loan debt, start out by applying for grants and stipends that connect to on-campus work. Those funds do not ever have to be paid back, and they never accrue interest. If you get too much debt, you will be handcuffed by them well into your post-graduate professional career.
Stafford and Perkins loans are the best federal student loan options. They are both reliable, safe and affordable. They are a great deal since the government pays your interest while you’re studying. The interest rate on a Perkins loan is 5 percent. Subsidized Stafford loans have a fixed rate of no more than 6.8 percent.
Keep in mind that a college may have its reasons for pointing your toward certain lenders for loans. Certain schools let private lenders use the name of the school. This is really quite misleading. Sometimes a school will have worked out a financial deal with a lender if you choose to use them. Know what is going on before you sign.
If college is on the horizon, and your finances are too modest to cover the expenses, take heart. By spending some time exploring the ins and outs of the student loan industry, you will be able to find the solutions you need. Do your homework now and ensure your ability to repay your loans later.