As you approach your last year of high school, you may notice offers for loans arrive in the mail. It might seem like a good thing to receive all those offers. It is important to learn all you can before taking on a mountain of debt.
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. This is generally a pre-determined amount of time once you graduate that the payments will have to begin. You can use this time to start saving up for some initial payments, getting you ready to avoid any penalties.
Don’t fret when extenuating circumstances prevent you from making a payment. When hardship hits, many lenders will take this into consideration and give you some leeway. Make sure you realize that going this route may result in increased interest.
Private Student Loans
Don’t eschew private student loans for financing a college education. Even though there are plenty of student loans publically available, you are faced with more people trying to secure them. Private student loans reside in a different category. Often, some of the money is never claimed because students don’t know about it. Check your local community for such loans, which can at least cover books for a semester.
Try not to panic if you can’t meet the terms of a student loan. Unemployment or a health problem can happen to you from time to time. There are options that you have in these situations. Just remember that interest is always growing, so making interest-only payments will at least keep your balance from rising higher.
Figure out what will work best for your situation. You will most likely be given 10 years to pay back a student loan. Check out all of the other options that are available to you. Understand if you choose a longer repayment period you will end up having to pay more in interest. It may also be possible for you to dedicate a portion of your salary to loan repayment once you have a regular paycheck coming in. Sometimes you may get loan forgiveness after a period of time, often 25 years.
Select the payment choice that is best for you. Many student loans will offer a 10 year repayment plan. If this isn’t right for you, you may be eligible for different options. For example, you could extend the amount of time you have to pay, however you will probably have a higher interest rate. You may also have to pay back a percentage of the money you make when you get a job. Some loan balances for students are let go when twenty five years have gone by.
When the time comes to repay student loans, pay them off based on their interest rate. You should pay off the loan that has the highest interest first. Whenever you have a little extra money, put it towards your student loans to pay them off as fast as possible. There are no penalties for paying off a loan more quickly than warranted by the lender.
College comes with a lot of choices involved, but most aren’t as important as what debt you take on. The decision to borrow money can be a perilous one if it’s entered into lightly. Keep in mind all that you read here as you prepare for both college and the future.
Author: Eddy PriceThis author has published 1098 articles so far. More info about the author is coming soon.