We’ve updated our Top 10 List of student loan tips for students preparing to graduate and enter “the real world.” Many students are looking at their student loans more closely now than they ever have before, and wondering how they will handle the burden. Our tips can help young people keep payments affordable, avoid fees and extra interest costs, and protect their credit rating.
“Students who are able to pay off their loan relatively quickly have often sided with a variable rate,” said Dayan. “However, the longer it takes a student to pay off the loan with variable rates, the more chances there are for the rates to change over the lifetime of the loan. If a student’s future income is uncertain, and they don’t plan on paying off the loan quickly, many students consider fixed-rate student loans for more consistency.”
Fixed interest rates will stay the same for the life of the loan but usually start our higher. Variable interest rates, on the other hand, fluctuate over time according to the market rate, but typically start our lower. There is no right answer to which is the best private student loan rate type; it really depends if you think interest rates will generally increase or decrease in the future.
Keep in touch with your loan servicer. Notify your loan servicer when you graduate; withdraw from school; drop below half-time status; transfer to another school; or change your name, address, or Social Security number. You also should contact your servicer if you’re having trouble making your scheduled loan payments. Your servicer has several options available to help you keep your loan in good standing.