Student Loans: Advice For College Students


Some people find it necessary to rely on student loans in order to attend college. On the other hand, most folks don’t want to deal with all this, and are easily overwhelmed by all the choices and information out there. Fortunately, this article will tell you what you need to know.

TIP! Know what kind of grace periods your loans offer. Usually, there is a time period after you leave school before you must begin paying the loans.

Be aware of the terms of any loans you take out. Make sure you know how much you owe and how to contact your lender. You also want to know what your repayment status is. All these details are involved in both repayment options as well as forgiveness potentials. Budgeting is only possible with this knowledge.

A two-step process can be used to pay your student loans. To begin, pay the minimum every month. Second, if you have any extra money, use it to make extra payments on the loan that bears the higher interest rate rather than the one that bears the highest balance. This will make things cheaper for you over time.

Payment Plan

Go with the payment plan that best suits your needs. Many loans offer a ten year payment plan. Other options may also be available if that doesn’t work out. Examples include lengthening the time it takes to repay the loan, but having a higher interest rate. You may also have to pay back a percentage of the money you make when you get a job. Certain student loan balances just get simply forgiven after a quarter century has gone by.

TIP! When you graduate, know how much time you have before you have to start making payments on your loans. For Stafford loans, it should give you about six months.

If you have a large loan, try to bring down the amount as soon as you can. This will reduce the principal. It should always be a top priority to prevent the accrual of additional interest charges. Stay focused on paying the bigger loans first. After you’ve paid your largest loan off in full, take the money that was previously needed for that payment and use it to pay off other loans that are next in line. 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. There are loan rewards programs that can help with payments. Two such programs are SmarterBucks and LoanLink. These allow you to earn rewards that help pay down your loan.

TIP! Choose a payment option based on your circumstances. Many loans offer a ten year payment plan.

Some people sign the paperwork for a student loan without clearly understanding everything involved. Always ask any questions that come up or if you need anything clarified. This is a good way for you to get scammed.

Interest Rates

TIP! To make the most of a loan, take the top amount of credits that you can. Full time is 9-12 hours, but you can go as high as 8.

Two of the most popular school loans are the Perkins loan and the often mentioned Stafford loan. These have some of the lowest interest rates. This is a great deal due to your education’s duration since the government pays the interest. Interest rates for a Perkins loan will be around 5%. The Stafford loans are a bit higher but, no greater than 7%.

If your credit is abysmal and you’re applying for a student loan, you’ll most likely need to use a co-signer. You must pay them back! If you miss a payment, you will saddle your co-signer with the debt.

TIP! Many obtain student loans, sign their documents, but remain clueless about what they’re signing into. If things feel unclear, it is important to get a better understanding of them right away.

PLUS loans are student loans that are available to graduate students and to parents. The interest rate is no greater than 8.5%. These loans give you a better bang for your buck. That is why it’s a good choice for more established and prepared students.

Remember your school could have some motivation for recommending certain lenders to you. They may have a deal with a private lender and offer them use of the school’s name. This is generally misleading. Your school may already have a deal going with a particular lender. You should know about the loan before getting it.

TIP! The Stafford and Perkins loans are the best options in federal loans. Many students decide to go with one or both of them.

Defaulting on your loans is not an easy way out. The government has multiples ways to collect on debt. For instance, you might see money withheld from Social Security payments or even your taxes. Additionally, they can garnish your wages. This can put you in a position that’s worse than the one you were in to begin with.

Don’t rely solely on student loans for financing your college experience. You should save money and look for grants and scholarships too. You can use a variety of websites that will tell you what scholarships or grants you’re eligible to receive. Make sure you start your search soon so you can be prepared.

Meal Plan

To make sure that your student loan dollars go as far as possible, buy a meal plan that goes by the meal rather than the dollar amount. With a meal plan based on the meal this means your meal will be a flat fee instead of a per item charge.

Add to the money you get from a student loan by looking for an on-campus job. This can offset your expenses somewhat and also give you some spending money.

Always be sure you understand the terms of the payback. Certain loans are known for having a grace period, and some have forbearance and other repayment options. It is critical that you are aware of your options and the lender’s expectations. Find these things out before signing any documents.

TIP! Double check all applications for errors. Bad calculations will affect the amount you can take out on a loan.

Stay in touch with the lenders both while in college and after college. Contact them with personal information changes like phone number, email, address, and name. This means that you are going to know about any terms changes or new lender facts. Also note that you are obligated to inform them of the date of your graduation or if you change schools or withdraw completely.

As stated earlier, lots of folks need student loans to get their degrees. After reading this article, you have the necessary knowledge to apply for a student loan. Go forth, get an education and realize your dreams!