The basics of finding the right student loan
You may start getting student loan offers in
the mail while you're still far from finishing high school. While you may find
that exciting, beware. There are things you should consider first before getting
into debt, so read on for great suggestions.
Think carefully when choosing your repayment
terms. Most public loans may automatically assume a contract of repayment, but
you may have the option to go longer. Refinancing over longer periods of time can
mean fewer monthly payments but greater total spending over time due to
interest. Balance your monthly cash flow against your long-term financial
picture.
If you are moving or changing your number, be
sure to provide all your information to the lender. Interest begins to accrue
on your loan for each day your payment is late. This is something that may
happen if you don't receive calls or statements every month.
If you have extra money at the end of the
month, don't automatically pour it into repaying your student loans. Check
interest rates first, because sometimes your money can work better for you in
investing rather than paying off a student loan. For example, if you can invest
in a secure CD that returns two percent of your money, this is smarter in the
long run than paying off a student loan with just one interest point. Do this
only if you are currently on your minimum payment and have an emergency reserve
fund.
If you're having trouble arranging funding for
college, look into possible military options and advantages. Even doing a few
weekends a month in the National Guard can mean a lot of potential funding for
college education. The potential benefits of a full round of service as a
full-time military person are greater.
Try shopping for your own loans. If you need to
borrow more, discuss this with your advisor. If a private loan or alternative
is your best bet, be sure to compare items like repayment options, fees, and
interest rates. Your school may recommend some lenders, but you are not required
to borrow from them.
Make sure you understand the terms of the loan
waiver. Some programs will forgive part or all of any federal student loans you
may have taken under certain circumstances. For example, if you are still in
debt ten years later and work in a public service, nonprofit, or government
position, you may be eligible for certain loan forgiveness programs.
Never sign any loan documents without reading
them first. This is a big financial move and you don't want to bite more than
you can chew. You need to make sure you understand the loan amount you will
receive, repayment options, and interest rate.
To make the most of student loan dollars, take
a job so that you have money to spend on personal expenses, rather than having
to take on additional debt. Whether you work on campus or at a local restaurant
or bar, having that money can make the difference between passing or failing
your degree.
If you're in graduate school, a PLUS loan may
be an option. They have a maximum interest rate of 8.5 percent. This rate
exceeds that of a Perkins loan or Stafford loan, but less than what private
lenders offer. For this reason, this is a good loan option for more mature and
established students.
If you are in a position to do so, sign up for
automated student loan payments. Some lenders offer a small discount on
payments made at the same time each month from your checking or savings
account. This option is only recommended if you have a stable and stable
income. Otherwise, you risk incurring a hefty overdraft fee.
For a bigger prize when applying for a graduate
student loan, use only your income and asset information instead of including
your parents' data. This lowers your income level in most cases and makes you
eligible for more help. The more grants you can get, the less you have to
borrow.
Make sure you understand the serious
implications of getting a student loan. This means that you should not miss out
on too many payments, as they can lead to delinquency and default. This can
significantly affect your credit score and can prevent you from getting more
loans you need in the future.
Always make sure you understand the terms of
the refund. Some loans have grace periods or offer other options for unusual
circumstances. You should know what the options and expectations are from the
lender. Read the entire loan agreement before signing any documents.
To make sure your student loan money isn't
wasted, place any money you receive in person in a special savings account.
Only go to this account when you have a financial emergency. This helps you not
to indulge in it when it's time to go to a concert, and leave your loan money
intact.
If you can't pay your bill, contact your
lender. You're more likely to get your lender to help you if you're honest with
them. Perhaps you will be eligible for a deferral or reduction of payments.
If you are having any trouble filling out your
student loan applications, don't be afraid to ask for help. Financial aid
counselors at your school can help you with anything you don't understand. You
want to get all the help you can so you can avoid making mistakes.
To make the most of your student loan dollars,
take as many college credit courses as you can while you're still in high
school. Often, these only involve the cost of end-of-course exams, if they
involve any cost at all. If you do well, you'll get college credit before you
finish high school.
There are many aspects to college, and one
important aspect is not accumulating too much debt when funding your education.
Borrowing large amounts of money at high interest rates can lead to big
problems. So, consider what you went to here while entering college and working
on the future.