Student loans generally begin showing up in your mailbox before you even graduate from high school. The offer of so much assistance toward your college aspirations are likely to seem like a dream come true. However, there are certain facets of student loans you need to be mindful of before signing up for anything.
Know all the little details of your student loans. Stay on top of what your balance is and know which lender you borrowed from, plus what your repayment status is. These details can all have a big impact on any loan forgiveness or repayment options. This information is needed for proper budgeting.
Stay in touch with the lender. Make sure your records are updated, such as your phone number and address. It is also important to open and thoroughly read any correspondence you receive from your lender, whether it is through traditional or electronic mail. Perform all actions to do as soon as you can. You may end up spending more money otherwise.
If you’re having trouble repaying loans, don’t panic. Unemployment and health emergencies can happen at any time. Make sure you are aware of the specific terms that apply to such circumstances, such as deferments or forbearance, which are part of most loan programs. The interest will grow if you do this though.
If you are thinking about paying off any of your student loans ahead of schedule, you should focus on the ones that have the highest interest. If you pay off the wrong loans first, you could end up paying more than you need to.
You are offered a grace period after you graduate before you must start paying on your student loans. Many loans, like the Stafford Loan, give you half a year. For a Perkins loan, this period is 9 months. Different loans will be different. It is important to know the time limits to avoid being late.
Make sure that you specify a payment option that applies to your situation. Many student loans offer 10-year payment plans. If you can’t make this work for your situation, check out other options if you can. For instance, you might have an option of paying over more years at the trade-off of higher interest. Once you start working, you may be able to get payments based on your income. Some balances are forgiven if 25 years have passed.
College requires lots of decision making, but taking out loans is perhaps the area of most concern to many. A substantial loan with a high interest rate can end up being a huge problem. Keep this material in mind as you launch your adventures in higher education.
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