You will get student loan offers in the mail sometimes before high school is what you’ve graduated from. It may seem great to have this opportunity. But, you need to tread carefully as you explore student loan options.
Always know all of the key details of any loan you have. You must pay close attention to how much you owe, what the terms are and the name of your lending institution. These things matter when it comes to loan forgiveness and repayment. It will help you budget accordingly.
Stay in communication with all lenders. Make sure you let them know if your contact information changes. Be certain you always open mail that comes from your lender, and that includes e-mail. Make sure that you take all actions quickly. It can be quite costly if you miss anything.
Don’t be driven to fear when you get caught in a snag in your loan repayments. You will most likely run into an unexpected problem such as unemployment or hospital bills. Do be aware of your deferment and forbearance options. Still, remember that your interest will have to be paid back, so try and pay what you can, when you can.
Paying down your student loans should be done using a two-step payoff method. Always pay on each of them at least the minimum. Second, you will want to pay a little extra on the loan that has the higher interest rate, and not just the largest balance. In this way, the amount you pay as time passes will be kept at a minimum.
Focus on paying off student loans with high interest rates. Repaying based on balance size could actually cause you to pay more in interest than you otherwise would have.
Pick a payment option that works bets for you. Many of these loans have 10-year repayment plans. You may discover another option that is more suitable for your situation. For instance, you can take a longer period to pay, but that comes with higher interest. Think about what you “should” be making in the future and carefully go over everything with a trusted adviser. Some student loans are forgiven once twenty five years have gone by.
Pay off larger loans as soon as possible. When you reduce your overall principal, you wind up paying less interest over the course of the loan. Make a concerted effort to pay off all large loans more quickly. After you have paid off your largest loan, continue making those same payments on the next loan in line. Make minimal payments on all your loans and apply extra money to the loan with the greatest interest in order to pay off all your loans efficiently.
For those on a budget already stretched to the max, the idea of a student loan can be scary. There are loan rewards opportunities that can help. Two such programs are SmarterBucks and LoanLink. These are similar to cash back programs in which you earn rewards for each dollar you spend, and you can apply those rewards toward your loan.
College is a time filled with lots of decisions, not the least of which is how much debt you take on. Borrowing excessively at high interest rates can cause serious problems. So, keep this information in mind as you enter college and embark on your future.