Student loans can help you achieve your dream of getting a college degree. But they can also get you in serious debt if you don’t consider all of the consequences before you borrow that money. Take the time to read up on student loans and how they can impact your future. Start with the tips below.
If you are having a hard time paying back your student loans, call your lender and let them know this. There are normally several circumstances that will allow you to qualify for an extension and/or a payment plan. You will have to furnish proof of this financial hardship, so be prepared.
Try getting a part-time job to help with college expenses. Doing this can help you cover some of your student loan costs. It can also reduce the amount that you need to borrow in student loans. Working these kinds of positions can even qualify you for your college’s work study program.
Do not default on a student loan. Defaulting on government loans can result in consequences like garnished wages and tax refunds withheld. Defaulting on private loans can be a disaster for any cosigners you had. Of course, defaulting on any loan risks serious damage to your credit report, which costs you even more later.
Learn the requirements of private loans. You should know that private loans require credit checks. If you don’t have credit, you need a cosigner. They must have good credit and a good credit history. Your interest rates and terms will be better if your cosigner has a great credit score and history.
Select the payment arrangement that is best for you. The majority of student loans have ten year periods for loan repayment. There are other options if you can’t do this. For instance, you might be able to get a longer repayment term, but you will pay more in interest. You might also be able to pay a percentage of your income once you begin making money. Some balances pertaining to student loans get forgiven about 25 years later.
Starting to pay off your student loans while you are still in school can add up to significant savings. Even small payments will reduce the amount of accrued interest, meaning a smaller amount will be applied to your loan upon graduation. Keep this in mind every time you find yourself with a few extra bucks in your pocket.
Be careful with private loans. The terms of such loans can be difficult to ascertain. Often, you don’t know until you have already signed on the dotted line. And at that moment, it may be too late to do anything about it. Find out as much as you can about them. If you receive an offer that’s great, see if other lenders can beat or match it.
The advice from above is just the beginning of what you need to know about student loans. Student loans are an incredible investment in your future. So you need to take the time to carefully consider what you will be borrowing and how it will all add up. The choices you make today can have great impact on your financial future.