Most college students rely on loans to help them pay tuition. Eventually, borrowing money means that you have to repay the amount plus interest and other fees. Follow these five steps to stay on top of your student loans.
Full-time students may find it difficult, or impossible, to work jobs during semesters. If you don’t have an income source, then you may feel tempted to borrow more money than you need to pay for tuition and other necessary expenses.
Pay close attention to how much you borrow on your student loan, and try to keep the amount as low as possible.
As of the 2018-2019 school year, the federal government charges a 5.05% interest rate. Private student loans can have fixed interest rates from 5.25% to 14.59% Variable rates range from 3.69% to 12.99%.
Compare interest rates from several student loan providers and read lender reviews, such as this review of Lendkey’s education options. You never know when you might find a lender that’s willing to give you a lower rate. Even saving 1% will make it easier for you to repay your loans after graduation.
If you have student loans from the Department of Education, then you get to choose between several repayment options, including:
Ideally, you’ll choose the Standard Repayment Plan so you can eliminate your debt within 10 years. If you face financial hardship after graduation, though, use a student loan repayment plan that works for your budget. Keep in mind, though, that the longer it takes to repay your loan, the more money you will spend overall, due to interest.
Student loans typically require monthly repayments. Missing a payment could result in additional fees. It could also harm your credit rating.
Make sure you always send in payments on time to avoid these and other financial punishments.
Setting up recurring payments ensures that you never send in a late payment. You should, however, keep a close eye on your recurring payments. They’re still your responsibility. If a payment doesn’t go through (either because you lack enough funds to cover the payment or your payment processor makes a mistake), the lender will hold you responsible.
With today’s high tuition costs, you’ll probably need to borrow some money while earning your college degree. Follow these steps to eliminate your student loan debt as quickly as possible and avoid negative repercussions from late payments.
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