Student loan offers will likely be sent to you before you even finish high school. Initially, these loan offers may seem like the answer. This may seem great, but there are still many things you must know in order to not put yourself into too much future debt.
Understand the grace period of your loan. This is the amount of time you have before the lender will ask that your payments need to start. Knowing this can help you avoid hefty penalties by paying on time.
Always be mindful of specific loan details. You need to know how much you owe, your repayment status and which institutions are holding your loans. These details all affect loan forgiveness and repayment options. This information is essential to creating a workable budget.
Keep in touch with the lender you’re using. Keep them updated on your personal information. Do not put off reading mail that arrives from the lender, either. Do whatever you need to as soon as you can. If you miss important deadlines, you may find yourself owing even more money.
Never panic when you hit a bump in the road when repaying loans. Unforeseen circumstances such as unemployment or health issues could happen. There are options that you have in these situations. It’s important to note that the interest amount will keep compounding in many instances, so it’s a good idea to at least pay the interest so that the balance itself does not rise further.
When you pay off loans, pay them off from highest to lowest interest rates. Try to pay the highest interest loans to begin with. Using the extra money you have can get these things paid off quicker later on. There is no penalty for early repayment.
Reduce the principal when you pay off the biggest loans first. You will reduce the amount of interest that you owe. Make a concerted effort to pay off all large loans more quickly. Once you pay off one big loan, transfer the payments amounts to the loans with the next highest balances. If you make at least the minimum payment on all loans and large payments on the biggest loan, your student loan balances will disappear.
Monthly student loans can seen intimidating for people on tight budgets already. There are loan rewards opportunities that can help. Check out programs from Upromise such as SmarterBucks and LoanLink. These give you rewards that you can apply toward your loan, so it’s like a cash back program.
Increase your credit hours if possible. Though full-time student status requires 9-12 hours only, if you are able to take 15 or more, you will be able to finish your program faster. This helps reduce the total of loans.
College comes with many decisions, but few are as important as the debt that you accrue. The decision to borrow money can be a perilous one if it’s entered into lightly. So, keep this information in mind as you enter college and embark on your future.