If you just graduated or decided to take a break from school, or you’re already in the process of repaying your student loans, the tips being shared today will help you keep everything under control. By using the suggestions we’re about to make, you’ll be able to protect your credit score, avoid paying extra interest and fees, keep your loan payments inexpensive and learn more valuable information.
With that said, let’s take a look at the best student loan tips for recent college grads and students in other situations.
Do You Know Your Grace Period?
Every loan is going to have a different grace period. What is it? It’s the length of time you’re allowed to wait after leaving school before you’re required to make your first payment. With federal Stafford loans, you’ll have to start repaying it within six months of graduation. With federal Perkins loans, the grace period is nine months.
So if you’re having a tough time finding a job immediately after graduation, know that you won’t have to start paying back your loans the second you finish school. But keep an eye on your grace periods, because you will need to start paying your loans once they’ve run out.
Prepay Student Loans When Possible
This isn’t going to be possible for everyone, especially while you’re in the middle of school. But if you have the means and ability to get a job to start working to pay off your loans, you should begin this practice as soon as possible. The faster you begin working to pay off your loans, the less you’ll pay over the long run and the less of a burden it will be after graduation.
Or if you can’t start saving money ahead of time, pay extra whenever you make your monthly payments as often as possible. By paying the additional amount each month, you’ll pay off your loan faster, pay less interest over the long term, and ultimately get out of student loan debt a lot quicker.
According to Student Loan Consolidation Made Easy, a website sharing information about banks that offer the best student loan consolidation options, “Different student loans will carry different interest rates, which are determined by the lender.” So keep that in mind.
Work Toward Paying Off Your Most Expensive Loans First
Why would you want to pay your most expensive loans first? Simply put, you’ll save money over the long term if you can pay back your loans with the highest interest rates the fastest. By going this route, you’ll save lots of money in interest payments by knocking down the debt quickly.
Some people prefer to use the snowball method. With this method, you pay off the lowest loan amounts first even if the interest rates are lower. People like this method because they can eliminate certain loans quicker and it makes them feel like they’ve accomplished something.
It’s up to you which method you choose for student loan repayment. Just know that paying your highest interest rate loans first will cost you less in interest payments overall.
Please use the best student loan tips for recent grads to get to know and understand your student loans better.