Student loans are great for offsetting college costs. However, a loan, unlike a grant or a scholarship, is not free money. You will need to pay the money back. To learn how to do that, read on.
Understand the grace period of your loan. This usually refers to the amount of time you are allowed after you graduate to pay back the loan. Knowing this allows you to make sure your payments are made on time so you can avoid penalties.
If you are having a hard time paying back your student loans, call your lender and let them know this. There are normally several circumstances that will allow you to qualify for an extension and/or a payment plan. You will have to furnish proof of this financial hardship, so be prepared.
If you have extra money at the end of the month, don’t automatically pour it into paying down your student loans. Check interest rates first, because sometimes your money can work better for you in an investment than paying down a student loan. For example, if you can invest in a safe CD that returns two percent of your money, that is smarter in the long run than paying down a student loan with only one point of interest. Only do this if you are current on your minimum payments though and have an emergency reserve fund.