Just about everyone knows a sad story of a young person who cannot bear the burdens of their student loan debt. It is important to be wary of signing on the dotted line until you really know what you are getting into. Luckily, this article has tips to help you make wise choices.
Make sure you know what the grace period is for your loans before you need to start making payments. This is typically a six to nine month period after your graduation before repayments start. Being aware of this will help you get a jump start on payments, which will help you avoid penalties.
If an issue arises, don’t worry. Job losses and health emergencies are part of life. Realize that there are ways to postpone making payments to the loan, or other ways that can help lower the payments in the short term. Remember that interest accrues in a variety of ways, so try making payments on the interest to prevent balances from rising.
Use a process that’s two steps to get your student loans paid off. Try to pay off the monthly payments for your loan. 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 reduce your spending in the future.
Prioritize your loan repayment schedule by interest rate. Go after high interest rates before anything else. Do what you can to put extra money toward the loan so that you can get it paid off more quickly. There is no penalty for paying off your loans early.
You may feel overburdened by your student loan payment on top of the bills you pay simply to survive. However, loans that offer a rewards program can soften the blow. For instance, look into the Upromise programs called SmarterBucks and LoanLink. These give you rewards that you can apply toward your loan, so it’s like a cash back program.
Lots of young graduates suffer from crippling debt right after they get their degrees. It is important to fully understand the terms of any student loan you apply for and agree to. These tips will help you incur just the right amount of debt for your situation.