On Managing Student Loans

Anyone who has acquired student loans to get themselves through college knows how challenging it can be to manage the loans. Even after completing college, continuous repayments have to be made for several years to come. This can be a daunting task for many, and the following tips will certainly help to ease off this burden.

Read on to find out how you can effectively manage your student loans and avoid extra fees and interest along with keeping your payments affordable.

1.  Know Your Loans Inside-Out
It is absolutely vital that you are fully aware of everything concerning your loan – be it keeping track of your lender, the remaining balance or the repayment status of the loan. If you are unaware of your loan’s status at any point in time, get in touch with your lender to clear up things.

2.  Know the Grace Period
Grace period simply refers to the duration you have after completing your college to the date on which you have to pay your first loan repayment. It can be 6 months or more – consult your lender to clarify this matter. This is particularly important if you had acquired a private loan. The grace period for private loans varies from one lender to another.

3.  Keep In Touch
Whether you change your residence or phone number, it is vital that you keep in touch with your lender and keep them apprised of any changes in your personal details. You really wouldn’t want to build a communication gap between the two of you. Make sure you read every mail that you get concerning your loans.

4.  Choose the Repayment Option That’s Right for You
Federal loans are generally based on a ten-year repayment plan. If you feel as if the payment over this period is going to be hard for you, you can consider extending the loan period beyond the ten-year margin. However, while the monthly payments will decrease, keep in mind that the amount of interest you have to pay will increase too.

5.  Make Sure You Stay Out Of Trouble
Never ignore your student loans as this can land you in serious trouble. When federal loans are concerned, default becomes apparent nine months after you failed to pay your loan payment. This will make your total balance become due and will completely ruin your credit score.
On the other hand, for private loans, the default happens much more quickly. By defaulting on a private loan, you will not only be putting yourself in trouble, but anyone who co-signed for the loan with you.

6.  Consider Student Loan Consolidation
It is best to consolidate your loan particularly if you have to pay numerous loans to various financial institutions. By consolidating your loan, you will be able pay off all your loans through a single, new loan. Consolidation is convenient as it merges all the loans into a single, affordable monthly payment with a fixed (or variable) interest rate, depending on the terms and conditions of your loan consolidation provider.

Resources

http://projectonstudentdebt.org/recent_grads.vp.html
http://money.usnews.com/money/blogs/my-money/2014/01/24/should-you-consolidate-your-student-loan-debt