Student Loan - Top 10 Mistakes To Avoid In 2009

Student Loan - Top 10 Mistakes To Avoid In 2009

December 22nd, 2008
Author: Sally Croft

When you are taking out student loans, you want to get the best possible deal to benefit from the loans fully. The following are the top 10 things to avoid in 2009 with regard to student loans:

Avoid multiple lenders, do your best to deal with only one lender. If you have taken student loans from three or four different lenders, it is advisable that you opt for a student loan consolidation. With student loan consolidation, you benefit from a single lender, lower payments and extended repayment plans.

Avoid going with the first offer. Before taking the services of any lender, you need to shop around and take quotes from at least ten or fifteen lenders.

Avoid adjustable rates. Instead of opting for adjustable interest rates, choose fixed interest rates. The main advantage of fixed interest rates is that no matter the market condition, your interest rate and payment amount are not going to increase.

Avoid shortfalls with grace periods. When availing a Student Loan, it is your responsibility to ensure that you get a grace period of at least three months from the lender. During the grace period, you do not need to pay anything to the lender. This can help you in improving your financial condition.

Avoid lenders that do not set monthly installments of Student Loan on the basis of your financial condition. Lenders who set your payments according to your income usually have better borrower benefits.

Avoid private loans. When it comes to student loans, you have two options: private and federal. Getting approval for Federal Student Loans is quite easy compared to private student loans but it does not mean that you do not give it a try. Only apply for private student loans when it is clear that you are not going to get approval for federal student loans or when you have exhausted all forms of federal loans and still need money for school.

Avoid late payments. Pay all your monthly installments on time so your credit rating improves. Some students take monthly installments very casually thinking that it is not going to affect their financial future. What they do not realize is that any delay in monthly installments is going to have a negative impact on their credit rating.

Avoid signing anything before you read it carefully. Read the terms and conditions of your student loan before signing because once you sign the agreement you will not be able to modify the terms and conditions of the loan.

Avoid extra fees. When selecting lenders for your student loan, make sure that they are not charging any sort of processing or application fee.
Avoid giving out more information than is necessary. When availing Student Loan, make sure that lender does not demand too many papers because there is a greater chance of your information getting lost or stolen.