Student loan offers will likely be sent to you before you even finish high school. You might see it as a blessing to have so many options. But, you need to tread carefully as you explore student loan options.
Make sure you stay in close contact with your lenders. Make sure they always know your address, phone number and email, all of which can change often during your college experience. Read all letters which you are sent and emails, too. Make sure you take action whenever it is needed. Neglecting something may cost you a fortune.
Private financing is one choice for paying for school. There is not as much competition for this as public loans. Private loans are often more affordable and easier to get. Look at these loans at a local college since they can cover one semester worth of books.
Don’t let setbacks throw you into a tizzy. Many people have issues crop up unexpectedly, such as losing a job or a health problem. Know that there are options available such as a forbearance or deferment. Just know that the interest will build up in some options, so try to at least make an interest only payment to get things under control.
If you are in the position to pay down your student loans, make the high interest loans your first priority. If you pay off the wrong loans first, you could end up paying more than you need to.
Know what the grace period is before you have to start paying for your loans. Stafford loans have a grace period of six months. If you have Perkins loans, you will have 9 months. Other types can vary. Be sure you know exactly when you will be expected to begin paying, and don’t be late!
For private loans, you may require a co-signature if you have no credit or bad credit. You have to make every single payment. If you’re not able to, then the co-signer is going to be responsible for the debt you have.
A PLUS loan is specifically oriented to address the needs of graduate students and/or parents. The interest rate on these loans will never exceed 8.5% While it may be more than other loans, it is cheaper than you will get through a private lender. This is often a good alternative for students further along in their education.
Don’t buy into the notion that you can default on your loans to free up money. Unfortunately if you do this, the federal government will use all means necessary to recover this debt. For instance, it can place a claim on your taxes or benefits in Social Security. The government may also try to take up around 15 percent of the income you make. This can become financially devastating.
College requires lots of decision making, but taking out loans is perhaps the area of most concern to many. Borrowing too much or borrowing ones with high interest rates can create a major problem for you. keep this information in mind and use it to help you get a good start at the college you plan on attending.