Most people know someone who suffers from a staggering amount of student debt. Unfortunately, this situation is all too common among young folks. Luckily, this article contains information that will help you sort the wheat from the chaff in terms of student loans.
Make sure you are in regular contact with the lender. When you make changes to your address or phone number, make sure you let them know. When your lender send you information, either through snail mail or e mail, read it that day. Make sure you take action whenever it is needed. If you miss something, that can mean a smaller loan.
Don’t worry if you can’t pay a student loan off because you don’t have a job or something bad has happened to you. Many lenders give you a grace period if you are able to prove that you are having difficulties. Just know that the interest rates may rise.
Do not panic when you are faced with paying back student loans. Life problems such as unemployment and health complications are bound to happen. Do be aware of your deferment and forbearance options. However, the interest will build during the time you are not making payments.
If you wish to repay student loans in advance, deal with the ones with the highest interest rates first. If you try to pay off the ones with the lowest balances first, you may pay more interest that you have to.
Know how much time your grace period is between graduating and when you need to start paying back loans. Stafford loans have a grace period of six months. For a Perkins loan, this period is 9 months. Other types can vary. Make certain you are aware of when your grace periods are over so that you are never late.
Choose a payment option based on your circumstances. The majority of loan products specify a repayment period of ten years. If this isn’t going to help you out, you may be able to choose other options. For example, you could extend the amount of time you have to pay, however you will probably have a higher interest rate. You could start paying it once you have a job. Sometimes student loans are written off after an extended period of time.
The best federal loans are the Stafford loan and the Perkins loan. These two are considered the safest and most affordable. These are good loans because the government pays the interest while you are still in school. The Perkins loan has an interest rate of five percent. On the subsidized Stafford loan, it’s fixed at no higher than 6.8%.
If you don’t have good credit, and you are applying for a student loan from a private lender, you will need a co-signer. You must pay them back! If you do not, you are affecting the credit of the person who went to bat for you.
Lots of young graduates suffer from crippling debt right after they get their degrees. For that very reason, anyone thinking about using student loans to make their education possible needs to be mindful of what they do. Use what you’ve just learned to take advantage of student loans without negatively affecting your future.