College tuition is very expensive. Most people cannot pay for college on their own. A student loan is often helpful if you are seeking a way to help pay for an education.
Know your grace periods so you don’t miss your first student loan payments after graduating college. Stafford loans typically give you six months before starting payments, but Perkins loans might go nine. Private loans are going to have repayment grace periods of their own choosing, so read the fine print for each particular loan.
Stay in touch with the lender. Make sure they know your current address and phone number. Do not neglect any piece of correspondence your lender sends to you, whether it comes through the mail or electronically. If any requests are made or important stipulations are shared with you, act on them right away. If you miss something, it may cost you.
If you have extra money at the end of the month, don’t automatically pour it into paying down your student loans. Check interest rates first, because sometimes your money can work better for you in an investment than paying down a student loan. For example, if you can invest in a safe CD that returns two percent of your money, that is smarter in the long run than paying down a student loan with only one point of interest. Only do this if you are current on your minimum payments though and have an emergency reserve fund.
Do not default on a student loan. Defaulting on government loans can result in consequences like garnished wages and tax refunds withheld. Defaulting on private loans can be a disaster for any cosigners you had. Of course, defaulting on any loan risks serious damage to your credit report, which costs you even more later.
Keep in mind the time that’s allotted to you as your grace period from when you get out of school until you have to start paying back the loan. For Stafford loans, it should give you about six months. A Perkins loan gives you a nine month grace period. Make sure to contact your loan provider to determine the grace period. Know when you are to begin paying on your loan.
When you pay off loans, pay them off from highest to lowest interest rates. The highest rate loan should be paid first. Anytime you have extra cash, apply it toward your student loans. There are no penalties for paying off a loan more quickly than warranted by the lender.
Once you leave school and are on your feet you are expected to start paying back all of the loans that you received. There is a grace period for you to begin repayment of your student loan. It is different from lender to lender, so make sure that you are aware of this.
While they can assist you during college, loans must be repaid one you have graduated or quit going to school. Many people borrow money for college without ever thinking about how they will pay off their debts. Using these tips, you’ll be able to get your education in an affordable manner.