Have you decided to take student loan as a recourse of getting you into college? Student loans are those financial assistance needed by students who wish to go to college but their finances hinders them. Spare a little of your time reading and understanding the top 10 tips about handling student loan.
- Do some planning before filling out any student loan applications, this will help you know exactly how much you need. Try and borrow only the amount that you need. Remember you will be paying interest on the loan amount, so keeping it as low as possible will save you money. And also, borrowing in excess will lead to a lot of stress and financial liability after you graduate.
- Do your research before applying for a student loan. So that you know exactly what the terms of the loan are, what are the exit fees (if any), how much interest are you paying, when is the interest calculated, the term of the loan, etc. Know and understand the terms and policies to avoid future problems. Watching the interest rate is particularly important on signature and private student loans. They might not matter to you much at the moment, but they will matter later when you’ve finished college. High interest rates can leave you in financial stress later and put you on the back foot for the rest of your life.
- Update your lender whenever you move out to another place or have changed your contact number. It’s better to leave your email address and notify them about any changes. If the lender ends up not reaching you it could cost you extra payments in fees that you would not have otherwise of had.
- Should you pay, monthly, fortnightly or weekly, you need to decide what best suits your situation and also what period will you take the loan out over? Holding onto a loan for more than 10 years can lower your monthly payments, giving you more to spend now, but you will end up paying more interest over time, sometimes you can even end up paying more interest than principal, so be really careful with your loan term.
- Don’t panic if you’re having troubles in making payments because of health problems, unemployment, or other unexpected financial challenges, remember that there are forgiveness options for managing your federal student loans. Be sure to communicate with your lender when you are going through difficult times, there may be other forgiveness repayment options for you.
- Don’t ignore your student loans and you would not get into trouble. Remember, consequences thus come afterwards and you don’t want that to happen. Follow their policies and with that nothing will go wrong.
- Put all your extra money into repaying your loan, you will find that you will pay it off much quicker and pay much less interest. You will be lowering your principal, and thus, reducing the amount of interest you end up paying over the life of the loan.
- If you do have a number of loans, pay the high interest ones first. If you have a number of loans, including private loans, pay these ones off first. If you’re considering making extra repayments to pay any of your loans of quicker the high interest rate ones should be paid off first even if they might be the bigger loan amount.
- Decide whether to consolidate your loans or not. If you are considering consolidating your loans and you have Federal Loans, leave these ones independent as you will lose all the benefits and repayment options – like deferral for unemployment reasons, etc. These only come with Federal Loans!
- Stick with reputable lenders. While there are hundreds of student loan lenders, not all of them are legitimate.