Few tips to share about private loans. Student loans are helpful, but if you don’t know what to look for, they can turn into a nightmare. It’s best to make yourself knowledgeable on the subject of student loans before signing any paperwork. Continue reading to understand what you should know before borrowing.
If you are moving or your number has changed, make sure that you give all of your information to the lender. Interest begins to accrue on your loan for every day that your payment is late. This is something that may happen if you are not receiving calls or statements each month.
Try shopping around for your private loans. If you need to borrow more, discuss this with your adviser. If a private or alternative loan is your best bet, make sure you compare items like repayment options, fees, and interest rates. Your school may recommend some lenders, but you’re not required to borrow from them.
To minimize your student loan debt, start out by applying for grants and stipends that connect to on-campus work. Those funds do not ever have to be paid back, and they never accrue interest. If you get too much debt, you will be handcuffed by them well into your post-graduate professional career.
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.
Taking out a PLUS loan is something that a graduate student can apply for. Interest rates are not permitted to rise above 8.5%. This is a bit higher than Perkins and Stafford loan, but less than privatized loans. These loans are much better suited to an older student that is at graduate school or is close to graduating.
Your financial aid may be insufficient to cover all of the expenses related to your education. Don’t think that the first offer you get will be the best. Check out multiple loan programs and compare them.
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 have a lot of information now on student loans to digest. Your decisions will affect the rest of your life, long after you graduate. Make smart choices and only take out the loans you absolutely need.