Great Student Loans Ideas From People Who Know All About It |
Posted: March 11, 2019 |
Student loans can help you achieve your dream of getting a college degree. But they can also get you in serious debt if you don't consider all of the consequences before you borrow that money. Take the time to read up on student loans and how they can impact your future. Start with the tips below. Start your student loan search by looking at the safest options first. These are generally the federal loans. They are immune to your credit rating, and their interest rates don't fluctuate. These loans also carry some borrower protection. This is in place in case of financial issues or unemployment following your graduation from college. Communicate often with the lender. When you make changes to your address or phone number, make sure you let them know. Anytime you receive a phone call, email or paper letter from your lender, pay attention to it as soon as it is received. You should take all actions immediately. If you miss something, that can mean a smaller loan. Don't let setbacks throw you into a tizzy. Anything can come up and interfere with your ability to pay, such as a medical emergency or getting laid off from work. Keep in mind that forbearance and deferment options do exist with most loans. Remember that interest accrues in a variety of ways, so try making payments on the interest to prevent balances from rising. If you choose to pay off your student loans faster than scheduled, make sure that your extra amount is actually being applied to the principal. Many lenders will assume extra amounts are just to be applied to future payments. Contact them to make sure that the actual principal is being reduced so that you accrue less interest over time. Paying your student loans helps you build a good credit rating. Conversely, not paying them can destroy your credit rating. Not only that, if you don't pay for nine months, you will ow the entire balance. When this happens the government can keep your tax refunds and/or garnish your wages in an effort to collect. Avoid all this trouble by making timely payments. If at all possible, sock away extra money toward the principal amount. The key is to notify your lender that the additional money must be applied toward the principal. Otherwise, the money will be applied to your future interest payments. Over time, paying down the principal will lower your interest payments. To keep the principal on your student loans as low as possible, get your books as cheaply as possible. This means buying them used or looking for online versions. In situations where professors make you buy course reading books or their own texts, look on campus message boards for available books. Take advantage of student loan repayment calculators to test different payment amounts and plans. Plug in this data to your monthly budget and see which seems most doable. Which option gives you room to save for emergencies? Are there any options that leave no room for error? When there is a threat of defaulting on your loans, it's always best to err on the side of caution. The best loans that are federal would be the Perkins or the Stafford loans. Generally, the payback is affordable and reasonable. They are favorable due to the fact that your interest is paid by the government while you are actually in school. Perkins loans have an interest rate of 5%. Stafford loans offer interest rates that don't go above 6.8%. Never sign any loan documents without reading them first. This is a big financial step and you do not want to bite off more than you can chew. You need to make sure that you understand the amount of the loan you are going to receive, the repayment options and the rate of interest. The advice from above is just the beginning of what you need to know about student loans. Student loans are an incredible investment in your future. So you need to take the time to carefully consider what you will be borrowing and how it will all add up. The choices you make today can have great impact on your financial future.
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