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| Tips for Saving Money |  On February 8, 2006, President Bush signed into law a budget reconciliation bill that will influence your student loans as a student and a graduate. The interest rate on any new student loans (Federal Stafford Loans) that you received after July 1, 2006 is fixed at 6.8%. Any student loans you have taken out prior to that date will remain at a changeable rate.
The fine news is that origination fees on student loans are scheduled to phase out over the next several years, which means fewer fees on your student loans. Besides, if you will get a graduate degree, a new PLUS Loan initiative will allow graduate and professional students to benefit from PLUS funds. This will let you to pay for your college with federally guaranteed, low-interest loans instead of Alternative Loans, which are usually more expensive.
If you are approaching graduation, you are probably considering consolidating your student loans through the Federal Loan Consolidation Program to decrease your monthly payments up to 50%. The advice given below will show you how to deal with questions you may have regarding graduation and how to handle your student loans.
The average new graduate will owe more than $220 in student loan payments every month. Even if you have not obtained your first student loan payment yet, you should take into account that there are essential deadlines approaching.
Because your rate is currently changeable and can increase to as high as 8.25%, it is advised that you lock in now while rates are still the 4th lowest in history. As the pattern of rising interest rates continues, your rate and monthly payment will likely increase if you do not consolidate before July 1st. How you control your student loans can influence greatly your financial future. Make it easier by following these simple guidelines.
Tip #1 - Don't let your interest rate increase. Student loan interest rates are changeable - they alter every July 1st. You can permanently lock in your interest rate by consolidating now.
Tip #2 - Use automatic payments. Most lenders offer a reduced interest rate when your student loan payments are automatically deducted from your checking or savings account. This can add up to big savings. Plus, you won't have to remember to write a check every month, and your loan payments will always be on time.
Tip #3 - Don't get behind on your payments. If you are having problem making your student loan payments, you should instantly contact your loan servicer to figure out if you are eligible for deferment or forbearance. Late student loan payments will negatively influence your credit as with any other loans.
Tip #4 - Select an appropriate payment option for you. Multiple payment options are available to student loan borrowers who consolidate. A payment plan that fits your current financial situation can help you keep up with your loans. And, you can switch plans when you need to.
Tip #5 - Get cash back from your student loans. A lender or servicer will often provide borrowers with motives to make their loan payments on time for a particular amount of time. For instance, CLC proposes borrowers up to $2,000 cash back after they make nine payments on time.
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