Student Loans- Being Smart About Your Credit
Ellisha Rader Mannering
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If you are planning to go to college, a student loan may be inevitable. While many students are able to get scholarships or can afford to pay for college on their own, this is not the case for many. There are many horror stories about student loans ruining credit or keeping the borrower in debt for most of their life, but these scenarios don’t have to happen to you. By knowing which loans are the best and how to pay your debt off in a timely manner, you can feel confident in using a student loan to pay for college.
The state you live in can also affect your student loan. According to a recent study, some states have lower debt rates than others. The top 5 states with the lowest debt rates include, Wyoming, Nevada, Arizona, California and New Mexico. If you don’t live in one of these states, you can still make student loans work for you.
One of the best ways to pay your student loan off quickly is to choose the right payment plan. Don’t opt for the standard payment plan if you can afford to pay more each month. The standard plan may seem cheaper, but you will end up paying back more money in interest in the long run. Check our your repayment options and don’t opt for the lowest monthly payment.
If you find yourself in the middle of a hardship and unable to pay your student loans, there are several things you can do to save your credit. One of the most common is to apply for deferment. This means you can take a break from making payments on the loan until you get back on your feet. The loan will continue to accrue interest during this time though.
You can also apply for loan forgiveness. While this is often hard to qualify for, if you are eligible, you will not be required to pay your loan back.
Do you have any experience with student loans and if so, was it good or bad?
Image via Wikimedia Commons.