College Loan Repayment
When it comes time to either take out student loans, or time to pay off those loans, there are actions that many students take which are both good and bad; do’s and don’ts. With the college degree becoming a near required piece of paper, it’s important for everyone to know what they need to do when it comes to financial aid.
Do: Loan Only What Is Required
This sounds simple, right?
Well thousands of students a year take out more money than is required for education purposes, rest assured this is a surefire way to find yourself clawing for life when it comes time to pay off these loans.
Buying a laptop with loan money is perfectly reasonable. Building your own $2000 gaming PC, on the other hand, is a completely frivolous decision.
Seems simple enough… huh?
Paying for your school’s meal plan with loan money is expected. Ordering pizza for you and your roommate every night because “everything is cool, I loaned out a couple thousand more than I needed” Well, that’s just plain stupid, and come repayment time you’ll agree.
Don’t: Take Out Private Student Loans
Do not look in the direction of private institutions for student loans. In some cases, there may be no other options, but it should be the last resort after exhausting other means. Federal loans do not need to be paid off until your schooling is complete.
Federal loans do not accumulate interest while you are enrolled at least part-time. In most cases, the same cannot be said about private student loans, which also have no fixed interest rate, depending completely on your credit score in the process.
Federal aid is just a whole lot more flexible in the favor of the student.
Do: Make Your Payments
Another simple request, yet one that is clearly not being met, since student loan debt continues to soar at nearly $3,000 every second. Make your payments, if it’s at all financially possible.
Your debt isn’t going to disappear without a trace, and without agreed payments being made, the amount owed can in fact climb to unimaginable heights.
Review your loan repayment clause often, and stay on top of it. This way you’ll build positive credit and the debt will diminish.
Don’t: Pretend Your Debt Doesn’t Exist
This should be obvious and goes hand in hand with the last Do. Even though your debt may at first seem intimidating, and it may seem like it will never disappear, continue to tackle it each month as payment is due.
Ignoring debt will ruin your credit, and credit can affect all areas of your financial life.
Do: Research What Each Loan’s Terms Are
Make sure you properly research the terms of your loans, nobody likes negative surprises.
Can’t stress this enough…
Know how your interest is calculated.
Learn what you can do to avoid unnecessary interest charges. It may seem a bit confusing at first, but ask questions till you understand your loan completely and what it entails.
Patience and Awareness
In today’s climate, student loans may certainly prove to be a bit complex. There are many options out there. However with the majority of students entering higher education, it’s a ‘necessary evil’ whether we like to admit it or not.
Proper knowledge will be your friend on how to best handle the task of the student loan at hand. Stay encouraged, work hard on it, learn to budget and you’ll see light at the end of the tunnel.
Patience and awareness will always carry and compliment you successfully through life.