Good Solid Advice About Student Loans That Anyone Can Use
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Posted on: 09/03/22
Student loans are suddenly becoming newsworthy and the news usually isnt good. There is an abundance of horror stories of student who are so far into debt that they just dont see a way out. But you can avoid costly mistake by planning wisely and educating yourself about student loans. the advice below is a great starting point.
Make sure you know what the grace period is for your loans before you need to start making payments. This is generally the period after graduation when the payments are due. Knowing this can help you avoid hefty penalties by paying on time.
Remain in contact with your lender. Always let them know when you change your phone number, mailing address or email address, and these things can happen often when you are in college. Be certain that you immediately review anything you get from your lender, be it an electronic notice or paper mail. Take any necessary actions as soon as you can. If you miss something, it may cost you.
Do not hesitate to "shop" before taking out a student loan. Just as you would in other areas of life, shopping will help you find the best deal. Some lenders charge a ridiculous interest rate, while others are much more fair. Shop around and compare rates to get the best deal.
Never ignore your student loans because that will not make them go away. If you are having a hard time paying the money back, call and speak to your lender about it. If your loan becomes past due for too long, the lender can have your wages garnished and/or have your tax refunds seized.
You are offered a grace period after you graduate before you must start paying on your student loans. If you have Stafford loans, you will usually have about 6 months. A Perkins loan gives you a nine month grace period. Other types of loans may vary. Know what you have to pay when, and pay on time!
Paying your student loans helps you build a good credit rating. Conversely, not paying them can destroy your credit rating. Not only that, if you dont pay for nine months, you will ow the entire balance. When this happens the government can keep your tax refunds and/or garnish your wages in an effort to collect. Avoid all this trouble by making timely payments.
To reduce the amount of your student loans, work as many hours as you can during your last year of high school and the summer before college. The more money you have to give the college in cash, the less you have to finance. This means less loan expense later on.
Take advantage of student loan repayment calculators to test different payment amounts and plans. Plug in this data to your monthly budget and see which seems most doable. Which option gives you room to save for emergencies? Are there any options that leave no room for error? When there is a threat of defaulting on your loans, its always best to err on the side of caution.
Exercise caution when considering student loan consolidation. Yes, it will likely reduce the amount of each monthly payment. However, it also means youll be paying on your loans for many years to come. This can have an adverse impact on your credit score. As a result, you may have difficulty securing loans to purchase a home or vehicle.
Now you have a better understanding of what you need to know about student loans. But dont be afraid to ask question and request for clarification on anything that you dont quite understand. Taking the time to educate yourself about student loans before you borrow can help you avoid costly mistakes that affect your future.