Few families can afford to put down all of the money for college upfront. Even with scholarships and financial aid, most students will incur some type of debt. Here are a couple of things you need to know before you start applying for student loans.
- Know the APR – You want to be sure that you are not biting off more than you can chew. A high-interest rate is going to leave you primarily paying the interest for years before you start to cut significantly into the principal. Federal student loans are likely to have the most affordable interest rates.
- The loan term – The term is the time period you have to pay back the loan. If you take a longer term, your monthly payments will be smaller. This can help if you don’t anticipate a high salary. However, you will be paying more interest in the long run, so a shorter loan term could be an effective way to save money.
- Hidden fees – Check to make sure you won’t be paying extra if you decide to pay your loan off early. Also, make sure you don’t have a balloon payment at the end to make your monthly payments smaller. You also need to know standard fees such as late payment penalties (even though you hopefully never have to worry about those).
Get Help Planning Your College Journey
College Planning Source offers the assistance that students and their families need. It all starts with a complimentary college planning assessment. Schedule yours by calling 858.676.0700 or by submitting our online contact form.
