Student Loans: How To Make The Most Of Them


Student loans play a critical role in the acquisition of higher education, but when unwisely obtained, they can produce real hardships. So educating yourself about student loans is best done before you sign on that line. So keep reading to find out the things you need to know before you borrow.

TIP! Make sure you know what the grace period is for your loans before you need to start making payments. This is the period of time after your graduation before your payment is due.

Find out what the grace period is you are offered before you are expected to repay your loan. This is typically a six to nine month period after your graduation before repayments start. Knowing this will give you a head start on getting your payments in on time and avoiding hefty penalties.

Be sure you understand the fine print of your student loans. You want to keep track of your balance, who your lender is and any current repayment status of your loans. These things matter when it comes to loan forgiveness and repayment. You will also need to know these things if you want to have an accurate budget.

TIP! Always figure out what the details of the loans you have out are. You need to watch what your balance is, who the lender you’re using is, and what the repayment status currently is with loans.

Don’t worry about not being able to make a payment on your student loans if something unexpected like job loss has happened. Generally, your lender will work with you during difficult situations. Just know that taking advantage of this option often entails a hike in your interest rates.

Don’t let setbacks throw you into a tizzy. You will most likely run into an unexpected problem such as unemployment or hospital bills. Make sure you are aware of the specific terms that apply to such circumstances, such as deferments or forbearance, which are part of most loan programs. The interest will grow if you do this though.

TIP! Stay in touch with your lending institution. Make sure they always know your address, phone number and email, all of which can change often during your college experience.

Pay your loans off using a two-step process. Try to pay off the monthly payments for your loan. The second step is applying any extra money you have to your highest-interest-rate loan and not the one with the biggest balance. In this way, the amount you pay as time passes will be kept at a minimum.

To pay down your student loans effectively, focus on the one that has the highest interest rate. If you think you will be better off paying the one with the highest monthly payments first, you may be wrong. Best to look at the interest rates.

Start Making Payments

When you graduate, know how much time you have before you have to start making payments on your loans. Six months is usually the length for Stafford loans. For Perkins loans, you’ll have a nine month grace period. Other types of student loans can vary. Be aware of exactly when you must start making payments, and be sure to make those payments on time!

TIP! Your loans are not due to be paid back until your schooling is complete. Make sure that you find out the repayment grace period you are offered from the lender.

Make sure that you specify a payment option that applies to your situation. You will most likely be given 10 years to pay back a student loan. If this does not fit your needs, you may be able to find other options. You might get more time with higher interest rates. You might even only have to pay a certain percentage of what you earn once you finally do start making money. It may be the case that your loan is forgiven after a certain amount of time, as well.

Make certain that the payment plan will work well for you. Many loans offer a ten year payment plan. You may discover another option that is more suitable for your situation. If you take a loan at a higher interest rate, for example, you can extend your time to pay. Therefore, you should pay it once you make money. Some loans’ balances get forgiven after 25 years.

TIP! Prioritize your repayment of student loans by the interest rate of each one. The one carrying the highest APR should be dealt with first.

When you begin to pay off student loans, you should pay them off based on their interest rates. Pay loans with higher interest rates off first. Using any extra cash available can help pay off student loans faster. You don’t risk penalty by paying the loans back faster.

Student Loans

TIP! Reduce the principal when you pay off the biggest loans first. The less of that you owe, the less your interest will be.

Pay off your biggest loan as soon as you can to reduce your total debt. The less principal you owe overall, the less interest you will end up paying. Focus on paying the largest loans off first. Once you pay off one big loan, transfer the payments amounts to the loans with the next highest balances. The best system for repaying your student loans is to make large payments on your biggest student loan while continuously making the minimum payment on smaller student loans.

For those on a budget already stretched to the max, the idea of a student loan can be scary. That can be reduced with loan rewards programs. Places to check out are SmarterBucks and LoanLink which are programs available from Upromise. Similar to popular cash-back programs, each dollar spent accrues rewards that are applied against your loan balance.

TIP! Never sign anything without knowing what exactly it says and means. It is important that you ask questions to clarify anything that is not really clear to you.

To maximize the value of your loans, make sure to take the most credits possible. While full-time status often is defined as 9 or 12 hours a semester, if you can get to 15 or even 18, you can graduate much sooner. This will help lower your loan totals.

To get student loans to go through quicker, fill out the documents properly. Giving incorrect information can cause the process to be delayed, resulting in having to start school later.

TIP! If you want your application for a student loan to be processed quickly, ensure that the forms are filled out completely and accurately. If you make a mistake, it will take longer to go through.

Student loans can be complicated, so it is important to learn as much as you can. Whatever choices you make may impact your future. It’s best to borrow wisely, so be mindful of all that you learned from this article.