Important Facts About Student Loans

Many people have no choice but to take out student loans to obtain an advanced degree. They are even necessary for many who seek an undergrad degree. Unfortunately, many people get a student loan but do not know how this will affect them. Continue reading to learn some facts about student loans.

Make sure you stay on top of applicable repayment grace periods. This is important for avoiding penalties that may result. Having this knowledge of when your payments are scheduled to begin will avoid incurring any penalties.

If you can’t make a payment on your loans because of unforeseen circumstances, don’t worry. Usually, most lenders let you postpone payments if some hardship is proven. Just know that taking advantage of this option often entails a hike in your interest rates.

Payment Options, Loan Rewards & Extra Class Hours

Make sure that you specify a payment option that applies to your situation. Most student loan companies allow the borrower ten years to pay them back. If this is not ideal for you, look into other possibilities. For instance, you could be given more time but have to pay more interest. The company may be willing to work with a portion of your net income. The balances on some student loans have an expiration date at 25 years.

The idea of paying off a student loan every month can seem daunting for a recent grad on a tight budget. There are loan rewards opportunities that can help. Consider Upromise and other similar organizations. These work like cash back programs, and the money you spend earns rewards that can be applied toward your loan.

You can stretch your dollars further for your student loans if you make it a point to take the most credit hours as you can each semester. Full-time is considered 9 to 12 hours per semester, take a few more to finish school sooner. This lets you minimize the loan amounts you have to accrue.

Popular School Loans, Credit & Avoid Defaulting Your Loans

Two of the most popular school loans are the Perkins loan and the often mentioned Stafford loan. These are both safe and affordable. This is a great deal due to your education’s duration since the government pays the interest. The interest for a Perkins loan holds at five percent. On the subsidized Stafford loan, it’s fixed at no higher than 6.8%.

If you don’t have very good credit and need a student loan, chances are that you’ll need a co-signer. You have to make every single payment. If you get yourself into trouble, your co-signer will be in trouble as well.

If you are in graduate school, a PLUS loan may be an option. They bear an interest rate of no more than 8.5%. While it may not beat a Perkins or Stafford loan, it is generally better than a private loan. This makes it a good option for established and mature students.

Defaulting on your loans is not an easy way out. There are ways that the government can collect the money against your wishes. For instance, it can place a claim on your taxes or benefits in Social Security. They can also tap into your disposable income. You could end up worse off that you were before in some cases.

Be Cautious, Keep Your Cool & Write Down Lenders Contact Information


  • Be very cautious about private student loans. It can prove difficult to find out what the exact terms are. A lot of the time you’re not going to learn about them until you’ve signed the paper. At this point, it may be very difficult to extricate yourself. Learn all that you can prior to signing. If you like an offer, see if other lenders will give you an even better one.


  • Stay connected to lenders or people that supply you money. You can learn about changes or issues that way. Your lender may also be able to provide you with valuable tips for repayment.


  • Do your best to avoid panicking when you have a large sum of money to repay on a student loan. Though it is considerable, the lenders do not expect it in one lump sum. You can reduce your student debt by committing to hard work and regular payments.


  • Make sure you pay strict attention to the loan terms. A grace period is offered in some loans, others offer a forbearance, and other circumstances may dictate other options. Make certain you discuss all of the alternatives with your lender. Before signing anything, find out more about it.


  • Keep in contact with lenders while you are in school and afterwards. If you have important contact information changes, or a name change, it is crucial that you inform your lender. This means that you’re knowledgeable about changes to lender or term information. In addition, make sure the lender knows when you graduate or leave school.
Additional Classes, Loan Research & Final Thoughts

To lower your need for loans, take lots of AP and double credit courses in high school. The grades in these classes and the AP test results can get rid of several classes and leave you with fewer hours you must pay for.

To limit your reliance on student loans, try to take additional classes online. You can get more than a full-time load this way and have the convenience of scheduling some classes around your current schedule. This will help you get more hours each semester.

extra classes equal less loans, Try to get federal loans before going to a private loan situation. There are many advantages to federal loans, including a fixed interest rate. It will keep your monthly payments steady. When you know exactly how much you have to pay each month, you can plan your budget better.

Find out which of your loans have the high interest, and pay those off before the others. This tried and true system will help you get out of debt quickly. It is vital you pay close attention to the terms of each loan. Devise a plan to keep your payments at a minimum.

For many people, student loans are the only way they can attend college. The main thing to do would be to borrow responsibly and learn everything there is to know before signing anything. These simple facts about student loans should help you if implemented.