Suzana Mikolova / August 29, 2019
You may begin getting loan offers before you are even ready to attend a university. It might seem like an ideal situation to get so many offers so soon. But here are some things that you need to consider before you sign up for a future of debt.
Always stay in contact with your lender. Anytime there are changes to your personal information such as where you live, phone number, or email, it is important they are updated right away. Do not put off reading mail that arrives from the lender, either. Do whatever you must as quickly as you can. If you don’t do this, then it can cost you in the end.
Don’t panic if you can’t make a payment due to job loss or another unfortunate event. Most lenders will let you postpone payments when experiencing hardship. Just be aware that doing so may cause interest rates to rise.
Don’t forgo private loans for college. There are plenty of public student loans to be had, but the competition to get them is fierce. Private student loans reside in a different category. Often, some of the money is never claimed because students don’t know about it. Look at these loans at a local college since they can cover one semester worth of books.
Paying down your student loans should be done using a two-step payoff method. First, be sure to pay the monthly amount due on each loan you have taken out. Second, you will want to pay a little extra on the loan that has the higher interest rate, and not just the largest balance. This will reduce your spending in the future.
Go with the payment plan that best fits what you need. Ten year plans are generally the default. If that isn’t feasible, there could be alternatives. For instance, you might have an option of paying over more years at the trade-off of higher interest. You can put some money towards that debt every month. The balances on some student loans have an expiration date at 25 years.
Pick out a payment option that you know will suit the needs you have. A lot of student loans give you ten years to repay. If this does not appear to be feasible, you can search for alternative options. As an example, it may be possible to extend your payment time, but typically that’ll include a higher interest rate. Another option would be a fixed percentage of your wages when you get a job. The balances on student loans usually are forgiven once 25 years have elapsed.
Pay off your loans in order of interest rates. The loan with the most interest should be paid off first. Then utilize the extra cash to pay off the other loans. Paying quicker than expected won’t penalize you in any way.
College is something that takes a lot of decision making, and there are some steps that cannot be missed. Borrowing large amounts of money at high interest rates can lead to big problems. Don’t neglect the information in this article; use it to help yourself make smart decisions.
FILED UNDER : Education News