« What will your first 30 days bring? | Main | Are you on track to graduate? »

May 16, 2008

Graceful ideas

barbara

It's graduation time! Congratulations to those of you who are finishing your degree this month. Take time to celebrate, but don't forget your student loan payments will be here before you know it (wah wah!Click here to learn about third-party website links.

Luckily your Federal Stafford Loans will likely have a 6 month grace period before your first payment. Have you thought about how you're going to use that time?

If you have unsubsidized Federal Stafford Loans, where all the interest accrued is your responsibility, you could use your grace period to pay off interest you've accrued during school. Otherwise, that interest will be capitalized (added to your principal balance) once your grace period ends.

That means you'd pay interest on interest. Paying even just a portion of your interest off could make sizeable difference in the total amount you pay.

If the government is paying your accrued interest with a subsidized Federal Stafford Loan or if you've already paid interest off yourself (nice work!), here's another idea for your grace period: practice making your payments. This way, you get used to making a payment each month AND you'll have a nice stash of cash once repayment does begin.

One other thing to think about: If you're finishing graduate school and dealing with Federal PLUS Loans for graduate students as well, know that you won't have a grace period on those loans. Repayment begins immediately even if you had your payments deferred while you were in school. However, some lenders will give you the option to align the repayment start dates of your PLUS and Stafford loans through a forbearance.

Post a comment

 

 

Staci & Babs Say...

Staci and Babs

Hey! Want a brand-new Volkswagen Jetta® TDI or other cool prizes? We've got 'em! And there's no purchase necessary!

Enter now for your chance to win!

 
Online Banking Report's Best of the web award
 
   

 Linking to non-Wells Fargo websites

Back to the Blog  
    When you click on a link marked with this icon, , you are leaving wellsfargo.com and entering a website that Wells Fargo does not control. Wells Fargo has provided these links for your convenience but does not endorse and is not responsible for the content, links, privacy policy, security policy, and information collection practices of non-Wells Fargo websites. We cannot guarantee how these third parties use web cookies or whether they place on your computer cookies that may identify you personally. We urge you to review the privacy policies of each of the linked websites you visit-before you provide them with any personally identifiable information. Click here to learn how to protect your personal information while using the internet.Back to the previous page  

 
 

Blog home | Blog index | About this blog | Privacy policy | Comment guidelines | Feedback | WellsFargo.com

© 2006-2008 Wells Fargo. All rights reserved.