Student loans are what a lot of people need to reach their college dreams, but they can become something bad for those that aren’t smart about them. It’s best to learn about loans before signing anything. The advice that follows is a good starting point.
Verify the length of your grace period before repayment of your loan is due. This is the amount of time you have before the lender will ask that your payments need to start. Knowing this will give you a head start on getting your payments in on time and avoiding hefty penalties.
Don’t panic if you can’t make a payment due to job loss or another unfortunate event. Most lenders will let you postpone payments when experiencing hardship. Just keep in mind that doing this might cause the lender to raise the interest rate on your loan.
Don’t panic if you have a slight hiccup when paying back your loans. You will most likely run into an unexpected problem such as unemployment or hospital bills. Know that there are options available such as a forbearance or deferment. Just remember that interest will continue to build in many of these options, so try to at least make payments on the interest to prevent your balance from growing.
Pay off all your student loans using two steps. First, make sure that you meet the minimum monthly payments of each individual loan. Second you should pay whatever you’re making extra to a loan that has a high interest rate, not the one with a higher balance. You will reduce how much it costs in the long run.
Check the grace period of your student loan. The period should be six months for Stafford loans. Perkins loans enter repayment in nine months. Other kinds of loans may have other grace periods. Know when you will have to pay them back and pay them on time.
In conclusion, you need to know as much as possible about student loans before getting one. The choices you make now can have big implications on your life, even well after you graduate from school. Learn about all of your borrowing options and pick the best deal for your situation.
