Jennifer Smith Posted on 5:34 am

Getting A Good Rate On A Student Loan

There are many people who were ruined when they took on too much student loan debt. Lots of people just jump in without realizing the outcome. The following piece details what you need to know.

Know the specifics about your loan. You need to stay on top of your balances, your lenders and the repayment status in which you find yourself at any given time. These details are going to have a lot to do with what your loan repayment is like and if you can get forgiveness options. Use this information to create a budget.

When paying off your loans, go about it in a certain way. First you need to be sure that you know what the minimum payments for the loans will be each month. Second you should pay whatever you’re making extra to a loan that has a high interest rate, not the one with a higher balance. This will keep to a minimum the total sum of money you utilize over the long run.

If you plan to prepay your loans, try to pay those with the highest interest rates first. Do not simply pay off the loan that has the smallest amount remaining.

How long is your grace period between graduation and having to start paying back your loan? Stafford loans typically give you six months. Perkins loans often give you nine months. The time periods for other student loans vary as well. Know exactly the date you have to start making payments, and never be late.

Anyone on a strict budget who is facing the repayment of a student loan is put in a difficult situation. There are frequently reward programs that may benefit you. Look at programs like SmarterBucks and LoanLink via Upromise. These give you rewards that you can apply toward your loan, so it’s like a cash back program.

Interest Rate

The Stafford and Perkins loans are good federal loans. They are the safest and least costly loans. They are great because while you are in school, your interest is paid by the government. The Perkins loan interest rate is 5%. The interest rate on Stafford loans that are subsidized are generally no higher than 6.8 percent.

Bad credit will mean you need a cosigner on a private loan. It’s a good idea to stay up to date with the payments you make. If you don’t keep up with payments on time, your co-signer will be responsible, and that can be a big problem for you and them.

Rid your mind of any thought that defaulting on a student loan is going to wipe the debt away. There are ways that the government can collect the money against your wishes. For example, it can step in and claim a portion of your tax return or Social Security payments. It is also possible for the government to garnish 15 percent of all disposable income. This will leave you worse off.

Make sure that you try to get scholarships when you go to college. You should save money and look for grants and scholarships too. You should check out websites that offer scholarship matching to help you find ones that you may qualify for. You should begin your search early as funds go quickly.

Double check your application for mistakes before you submit it. This is something to be careful with because you may get less of a student loan if something is wrong. If you are unsure of anything in your application, talk with a financial aid counselor at your school.

For a lot of people that graduate, a student loan that caused them debt will make things hard on them at first. For that reason, anyone contemplating borrowing money to finance their education must pay close attention to what they are doing. This article has shown how to decide on the best way to pay for a college education.