You may find advertisements for student loans before leaving high school. While you may find that exciting, beware. But here are some things that you need to consider before you sign up for a future of debt.
Grace Period
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. The grace period is the amount of time between your graduation date and date on which you must make your first loan payment. Having this knowledge of when your payments are scheduled to begin will avoid incurring any penalties.
To make paying for college easier, don’t forget to look at private funding. There are plenty of public student loans to be had, but the competition to get them is fierce. Private loans are not in as much demand, so there are funds available. Explore the options in your community.
Don’t be driven to fear when you get caught in a snag in your loan repayments. Unemployment or health emergencies will inevitably happen. Remember that forbearance and deferment options are widely available on a lot of loans. Interest will build up, so try to pay at least the interest.
Choose payment options that best serve you. Most loans have a 10-year repayment plan. It is possible to make other payment arrangements. As an example, it may be possible to extend your payment time, but typically that’ll include a higher interest rate. Some student loans will base your payment on your income when you begin your career after college. Certain student loan balances just get simply forgiven after a quarter century has gone by.
When repaying student loan obligations, prioritize them by interest rate. The one carrying the highest APR should be dealt with first. Whenever you have a little extra money, put it towards your student loans to pay them off as fast as possible. There is no penalty for repaying sooner than expected.
Starting college means making important decisions, but none are quite as important as thinking about the debt you are about to take on. Choosing to borrow too much money, along with a higher interest rate can quickly add up to a big problem. Keep in mind all that you read here as you prepare for both college and the future.
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