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Student Loans | XLFinancialBlog.com

Use Student Loans Wisely

Posted on 25. Mar, 2015 by in Financial Planning

Congratulations, you are going to college! Now you just have to pay for it. Unless you have saved money, earned a scholarship, or come from a well-to-do family, you will probably need to take out student loans to cover your costs of tuition and books. This can be a good option, as long as you handle your loans wisely.

Be Aware of What You Borrow

Student Loans | XLFinancialBlog.comFilling out student loan paperwork can be confusing. Make sure you fully understand what your school costs are before signing on the dotted line. Remember, this is not free money. Shortly after graduation, you will be expected to start making your monthly payments to pay it back. Figure out exactly how much you need to borrow each semester, and stick to that number. For example:

  • Tuition Fees: Find out what the upcoming semester’s fees will be and plan accordingly. You do not want to borrow too much or too little.
  • Books and Supplies: Research the total cost of textbooks and other supplies so you will be fully prepared when you apply for your loan.
  • Room and Board: If at all possible, pay for your room and board out of pocket instead of borrowing this amount. Consider living at home or with several roommates for an economical living arrangement. Remember, the fewer dollars you borrow, the fewer you will have to pay back.

Read Your Contract’s Fine Print

Before you sign, read every detail of your repayment contract. It is crucial to know the specific details of your student loan so you can meet your obligations easily. Find out:

  • Amount of monthly payments
  • Percentage rate
  • When payments begin
  • Number of years designated to repay your loan

Pay On Time

Your credit score will be affected by how responsibly you handle this debt, so pay on time! Understand your student loan so you can pay it back promptly without feeling strapped. Handle your finances wisely, so you can focus on what is really important: your education.

 

 

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