1. Know What You Owe
It is easy to get wrapped up in all of the chaos that beginning college and working through your courses can create. As you begin searching and take out federal student loans and/or private student loans, it can be easy to forget everything that you borrowed.
Before you begin your payments, it is necessary to contact your loan provider and find out what you will owe. This is not only vital financial information, it will also help you figure out what your monthly payments will be so you can begin budgeting.
2. Make Sure Your Contact Information is Updated
In order to ensure that your lender can get ahold of you before your payments begin with any important updates or messages, you will want to make sure all of your contact information is updated. This will be especially urgent if you have a different home address, phone number, or email address after you graduate.
3. Sign up Online to Quickly Manage an Account and Payments
Another good thing to do is to sign up on your loan lender’s website so you can quickly manage your account and make payments online. You will also be able to view your loan information and contact your provider if you should have any questions or concerns about your student loans.
4. Sign Up to Receive Email Communications and Notifications
As you are creating your online account, ensure you update your email address and sign up for email communications from your loan provider. This will allow them to contact you if there are any important messages, reminders, or updates about your loans and payments.
5. Sign Up for Automatic Payments
Most lenders offer the option of signing up for automatic payments for your student loans and this is an excellent way to save money on them. Auto Pay deducts the monthly payment from your checking or savings account on a specific date so you don’t have to remember to set up the payment each month or risk having a late fee.
Lenders prefer you sign up for automatic payments since it is more reliable and they can be more confident that they will receive their funds each month. As an incentive to enroll in this, many lenders will decrease the loan’s interest rate, greatly reducing the amount of extra money you will have to pay back outside of the principal balance.
6. Research Repayment Plans and Choose the Best One
Repayment plans will vary greatly from lender to lender, but it is vital to understand their criteria as well as the conditions before you sign the dotted line. Some repayment plans will allow you to make no payments while in school but then need to be paid off within 10 years after you graduate, while others might require you to pay a certain amount while you attend college but then have lower payments over the course of 15 or 20 years. The best way to find out your options for repayment plans is to talk to your loan provider.
7. Know When Your First Payment is Due and Make All of Your Future Payments On-Time
By making all of your student loan payments on time, it shows that you are a trustworthy lender and it will improve your credit score. This proves to other lenders and financial institutions that you are responsible and are a good candidate for future loans down the line, such as car loans or mortgages.
8. Consider Paying Slightly Above the Minimum Each Month
Another way to save money on your student loans in the long run is to pay above the minimum each month, even if it is only ten or twenty dollars. While this may not seem like a lot of money, it could end up saving thousands of dollars over the life of your loan and ultimately decrease the length of your loan by many months. As you pay slightly above the minimum payment, you end up paying less interest and pay off your student loans faster in the process.
9. Contact Your Lender at the First Sign of Trouble
If you find that you are having trouble making the minimum payment each month, contact your loan provider immediately to see what other options you have before you default. Some banks that offer education loans are willing to work with you to find a payment plan that fits your budget and will be something you can afford.
10. Use Deferment or Forbearance Only as a Last Resort
By deferring your student loans or going in forbearance on them, interest continues to accrue and could end up adding hundreds or even thousands of dollars to your total. While these are better options than having late payments or not paying at all, they should be used as a final resort only. Again, make sure to contact your loan provider to see if deferment or forbearance are the best choices for you.
Author: Jeff Gitlen
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