Are student loans the only way you can feasibly attend college? You’re not alone. Unfortunately, thousands of people have no choice but to borrow money to pay for their college education. But the good news is that there are a lot of loan options out there to help you obtain your degree.
The trick is knowing what loan is right for you, and this requires doing a little homework. You really can’t afford to leave things to chance and grab the first loan offered to you, or you could end up regretting it down the road. A recent national study revealed that more than half of polled student loan holders said they would have done things differently when choosing their student loans if given the opportunity to make those decisions again.
To ensure you don’t regret your student loan choices, review these tips before you commit!
Check out the different types of loans available to you. For instance, there are various federal loans such as PLUS, Stafford, and Perkins loans, as well as private loans available through financial institutions like banks and credit unions. Each type of loan has different features and rules, so compare at least a few of them before deciding which way to go. You can find out what’s out there by doing an online search or using a student loan comparison tool like SimpleTuition . As a courtesy, you will be leaving Blog.BankFive.com and going to another website. We have approved this site as a reliable partner, but you will no longer be under the security policy of BankFive.com. Come back soon!
Don’t get in over your head. In other words, don’t borrow more money than you need. Experts recommend that your loan payments shouldn’t exceed 8 percent of your salary, so before taking out a loan it’s a good idea to research an entry-level salary in the field you’re planning to get into. This way you’ll have at least some idea of what schools you can and can’t afford. If you still have a few years until college begins, it would be smart to start saving as much money as possible in order to reduce the amount you’ll need to borrow. There are many handy college saving calculators out there to help you plan.
Understand the terms of your loan. Know when you’ll be expected to begin making payments on your loan, and understand how frequently those payments will need to be made (usually monthly). It’s extremely important to keep in mind that you’ll be responsible for repaying the loan. Don’t lose sight of the fact that even if you don’t complete your education, or secure a job right after graduating, you’ll still be expected to pay your loan back.
Keep the paperwork. No matter how good your memory is, it’s nearly impossible to remember all the details surrounding a student loan. So keep all the documents you’re given throughout the loan application process, in case you need to refer to them later.
Know the importance of making your loan payments on time. You don’t want to end up ruining your credit by missing student loan payments. Doing so can make it extremely difficult (if not impossible) to purchase a car or home in the future. If you run into problems repaying your loan, contact the loan company immediately to discuss your payment options.
Stay in touch. With the loan company, that is. They’ll need to know if you change your address or name, or if you withdraw from school, transfer to another school, or drop below half-time status. Remember that it’s up to you to stay on top of your student loan payments!