10 Things You Need to Know About College Loans

Here are some important details on getting a college loan. You don't have to spend more for college than necessary.

1. Your school may have its own college loan program, though it may not always be the best deal around. Some may have arrangements with private lending firms, which tend to offer higher rates. Always consider different loan providers and the different loan programs available to you to get the best value.

2. Choose between the lowest rates around. Because college loans do not require payment while you're still in college, choosing a policy with the lowest rate proves vital in preventing a post-college financial struggle.

3. You don't have to borrow the maximum amount they are offering. Borrow only the amount you really need, determined by taking into consideration your financial status, the total amount of expenses you'll be incurring, and the amount that will be shouldered by your parents or family. Minimizing the amount you intend to borrow will be of big help when the time comes that you have to include the payments in your monthly budget.

4. Applying for college loans takes time, so submit your application early. This way, you won't have to miss the first few classes. Also, follow instructions meticulously to avoid delays.

5. You can earn enough during college to significantly reduce your loan. You can cover part of the expenses by taking on a part time job, so that you won't have to borrow as much money as you initially determined.

6. Choose a loan policy that has a fixed student loan rate, and stay away from fluctuating loan rates. While fluctuating rates can either be an advantage or a disadvantage, a fixed rate will keep a low rate at such level until the end of the loan term, and thus help keep your finances more manageable come repayment time.

7. You can avail of an additional loan, but do so only after consulting with a financial aid counselor. You'll do well in paying for the interest of the loan while you're in college, instead of letting it accumulate and add to your future obligations.

8. Student loans are the least expensive of the options around, followed by federal or direct loans, while alternative loans are the most expensive.

9. When opting for a direct or Stafford loan, expect a deduction of up to 4 percent, as a fee, from the amount that is supposed to be sent to your school.

10. Once your loan becomes effective, it would be wise to monitor your loan account or the repayments due monthly after you have finished college. This is to make sure that no unnecessary or unfair adjustments are made, and help you determine what you could do to lower the amount.