(StatePoint) It’s no secret college can be expensive, and families are often faced with finding creative ways to cover the costs. Whether borrowing student loans or parent loans has always been part of your family’s plan or it is suddenly being considered due to new financial circumstances, there is good news: several smart strategies can help you save money.
• Automate payments: Automating payments not only gives you the peace of mind that comes with knowing that your bills will be paid on time, every time, but some lenders even offer interest rate reductions alongside this option.
• Choose a shorter repayment term: Some private lenders allow you to customize the length of your repayment term. If it’s in your monthly budget to do so, select a shorter term. While monthly payments will likely be higher, you’ll save in the long run.
• Start early: Consider making monthly payments on the loan while the student is still in school. Payments may be deferred during this time, but the loan may still be accruing interest that will be added to your loan balance. Check with your lender. Use a student loan calculator, like the one from College Ave Student Loans to see how a small monthly amount can make a big difference.
• Go above and beyond: When possible, make additional payments on your loan. Whether you choose to do this monthly or in lump sums after special occasions (e.g. tax refunds and graduation gifts), this can be a good way to get ahead of your repayment schedule and reduce interest charges. Just be sure your lender doesn’t charge a fee for doing so.
• Borrow federal first: Borrow federal student loans in the student’s name first. They offer low fixed interest rates to all borrowers, not just those with excellent credit scores. Plus, they offer special benefits like income-driven repayment and loan forgiveness options not typically offered on private loans
• Shop around: If federal student loans don’t adequately cover college costs, private student loans can fill the gap. Be sure to comparison shop to learn which lender will offer you a good interest rate, as well as multiple repayment options that fit your family’s budget. When shopping, look for a pre-qualification tool offered on the lender’s site that will share what rates you can expect without a hard check on your credit.
There are a number of private student and private parent loan options available at great rates from College Ave Student Loans, which offers streamlined customer service features and cost-saving perks, such as an interest rate reduction when you automate payments and no penalties for additional payments made. Their easy, transparent loan application process offers an instant credit decision, so there is no period of uncertainty. More tips, resources, guides and financial expert advice to help you navigate the financial road to college can be found by visiting, collegeave.com.
“The pandemic has created some uncertainty for many families,” says Joe DePaulo, co-founder and CEO of College Ave Student Loans. “However, there are steps you can take now to create a solid plan to cover your upcoming college costs.”
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