Student loan offers often arrive in the mail long before you finish high school. You might think this is a terrific thing. This may seem great, but there are still many things you must know in order to not put yourself into too much future debt.
Verify the length of your grace period before repayment of your loan is due. The grace period is the period between when you graduate and when you have to start paying back your loans. Having this knowledge of when your payments are scheduled to begin will avoid incurring any penalties.
Know all of your loan’s details. This will help you with your balance and repayment status. These three things will affect future repayment plans and forgiveness options. Use this information to create a budget.
Try not to panic if you can’t meet the terms of a student loan. Many people have issues crop up unexpectedly, such as losing a job or a health problem. Lenders provide ways to deal with these situations. Interest will build up, so try to pay at least the interest.
Pay your loan off in two steps. Begin by ensuring you can pay the minimum payments on each of your loans. Next, make sure to apply additional funds to loans bearing the highest rates of interest, not necessarily the loans with the greatest balance. It’ll help limit your spend over a given time.
Month Grace Period
Be aware of the amount of time alloted as a grace period between the time you complete your education and the time you must begin to pay back your loans. Stafford loans provide a six month grace period. Perkins loans offer a nine month grace period. The time periods for other student loans vary as well. Keep in mind exactly when you’re supposed to start paying, and try not to be late.
Figure out what will work best for your situation. Lots of student loans offer ten-year repayment plans. If this is not ideal for you, look into other possibilities. For instance, you could be given more time but have to pay more interest. Additionally, some loans offer a slightly different payment plan that allows you to pay a certain percent of your income towards your debt. Some balances on student loans are forgiven when twenty-five years have passed.
Few decisions in college will be as important as how to deal with your student loans. Choosing to borrow too much money, along with a higher interest rate can quickly add up to a big problem. So, remember what you have learned from above as you head off to college and start your future.