January 16, 2018

Student Loans Primer

student loans south africaare you thinking of getting a student loan to pay for your college education? learn the facts first on student loans so you will pass and succeed with flying colors.

  • accrued interest-interests on student loans are accrued over time
  • default rate-a student is in default when he or she hasn’t kept up with payments. the default rate measures the percentage of borrowers who are who have exceeded the number of days allowed to make payment. for federal loans, the number of days is 360. for private loans, the number of days is 120 days.
  • deferment– if you cannot make payment on time, you can request for a deferment which is a temporary non-payment of your loan. this is only available for subsidized loans. private student loans do not offer deferments.
  • forbearance– you may not be eligible for deferment so you can opt for forbearance. this is when borrowers are temporarily allowed to postpone payments or make smaller payments than what was originally scheduled.
  • grace period– you are not supposed to pay off your loan immediately after you graduate.  good thing that there is a grace period depending on the type of loan that you have obtained. this will give you the time to find work first.
  • grants and scholarships– these should be exhausted first by students who are seeking to get into a university as they do not require borrowing. you have to check with your school if they can give you a letter to qualify and what are the criteria for these two.
  • repayment schedules-repayment schedules let you know you when your payments are due and the term of the loan
  • subsidized loan-subsidized loans, which are awarded based on financial need, don’t require students to pay interest until after they graduate. the federal government will subsidize or pay for the interest that has piled up over time.
  • unsubsidized loans– the federal government does not pay interest while students are in school

these are just some of the terms that you have to be aware of. there are more of course that you must learn about. do you homework first before getting a loan. exhaust all other sources of money before signing a loan agreement. remember to pay off your loan should you decide to go ahead with it and finish your studies. you are on the road to a brighter future if you handle your finances and your career well.

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