Student Loans: Tips For Every College Student And Parent

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.

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.

Speak with your lender often. Update them anytime you change your email, name, address, or phone number, which is common in college. Also, be sure you immediately read any kind of mail you get from a lender, whether its electronic or paper. You need to act immediately if a payment is needed or other information is required. Failure to miss anything can cost you a lot of money.

If you cant make a payment on your loans because of unforeseen circumstances, dont worry. The lenders can postpone, and even modify, your payment arrangements if you prove hardship circumstances. However, this may negatively affect your interest rate.

Once you leave school and are on your feet you are expected to start paying back all of the loans that you received. There is a grace period for you to begin repayment of your student loan. It is different from lender to lender, so make sure that you are aware of this.

Be aware of the amount of time alloted as a grace period between the time you complete your education and the time you must begin to pay back your loans. For example, you must begin paying on a Stafford loan six months after you graduate. For Perkins loans, youll have a nine month grace period. The amount you are allowed will vary between lenders. Make sure you know how long those grace periods are, and never pay late.

You should shop around before deciding on a student loan company because it can end up saving you a lot of money in the end. The school you attend may try to sway you to choose a particular one. It is best to do your research to make sure that they are giving you the best advice.

When deciding how much money to borrow in the form of student loans, try to determine the minimum amount needed to get by for the semesters at issue. Too many students make the mistake of borrowing the maximum amount possible and living the high life while in school. By avoiding this temptation, you will have to live frugally now, but will be much better off in the years to come when you are not repaying that money.

To keep your overall student loan principal low, complete your first two years of school at a community college before transferring to a four-year institution. The tuition is significantly lower your first two years, and your degree will be just as valid as everyone elses when you graduate from the larger university.

Exercise

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.