Few important things you need to know about private loans. You may need a student loan at some point. Maybe you need one now, or perhaps it’ll happen down the road. For this reason, you should what you can about how they work in advance. Below, you will find many tips to help you make sense of it all.
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.
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.
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.
Be careful when consolidating loans together. The total interest rate might not warrant the simplicity of one payment. Also, never consolidate public student loans into a private loan. You will lose very generous repayment and emergency options afforded to you by law and be at the mercy of the private contract.
Look into PLUS loans for your graduate work. The interest rate on these loans will never exceed 8.5% This rate exceeds that of a Perkins loan or a Stafford loan, but is lower than private lenders offer. This is the best option for mature students.
If the financial aid package you have will not cover all the expense of attending the school of your choice, a private loan may be necessary. However, don’t apply with just one lender. Before agreeing to any loan, it is important that you search around for a deal that works best for you.
Make sure you keep track of your loans. You should know who the lender is, what the balance is, and what its repayment options are. If you are missing this information, you can contact your lender or check the NSLDL website. If you have private loans that lack records, contact your school.
Know your grace periods so you don’t miss your first student loan payments after graduating college. Stafford loans typically give you six months before starting payments, but Perkins loans might go nine. Private loans are going to have repayment grace periods of their own choosing, so read the fine print for each particular loan.
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.
You may need a loan for school now or maybe down the road. Knowing how they work will help you when the time comes. Use the advice you have read here to guide your decision.