Student loans are suddenly becoming newsworthy and the news usually isn’t good. There is an abundance of horror stories of student who are so far into debt that they just don’t 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.
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.
Think about what payment option works for you. The ten year repayment plan for student loans is most common. If this does not fit your needs, you may be able to find other options. For example, you may be able to take longer to pay; however, your interest will be higher. Once you start working, you may be able to get payments based on your income. It may be the case that your loan is forgiven after a certain amount of time, as well.
Pay off larger loans as soon as possible. The less principal that is owed, the less you’ll have to pay in interest. Focus on the big loans up front. When a large loan is repaid, just start paying on the next ones you owe. The quickest way to pay down these loans is to tackle the largest one first, but keep making payments to the smaller ones in order to quickly pay down the entire debt.
To keep the principal on your student loans as low as possible, get your books as cheaply as possible. This means buying them used or looking for online versions. In situations where professors make you buy course reading books or their own texts, look on campus message boards for available books.
To help maximize the money you get from student loans, sign up for additional credit hours. If you sign up for more course credits each semester you can graduate a lot quicker, which in the end will save you a lot of money. This helps you shave off some of the cost of your loans.
Try looking at consolidation for your student loans. This can help you combine your multiple federal loan payments into a single, affordable payment. It can also lower interest rates, especially if they vary. One major consideration to this repayment option is that you may forfeit your deferment and forbearance rights.
If you apply for a private student loan and your credit is not that great, you are going to need someone to co-sign for you. It’s imperative that you make your payments on time. If you fail to do so, the co-signer will be responsible for the payments.
Now you have a better understanding of what you need to know about student loans. But don’t be afraid to ask question and request for clarification on anything that you don’t quite understand. Taking the time to educate yourself about student loans before you borrow can help you avoid costly mistakes that affect your future.