We’ve allÂ heard the saying, read between the lines, but most of us don’t bother.Â I mean, can you honestly tell me you read theÂ terms and conditions when you purchase something?Â Â You probably just scroll down to the bottom and click accept.Â Am I right?Â I know I’m guilty of the latter. Â I really should read the fine print – we all should.Â The devil, after all,Â lies within the details.Â Â Last yearÂ my friendÂ April learned this lesson the hard way.
AprilÂ attended Northeastern University from 2004-2008. During that time sheÂ amassed $35,000 in private student loan debt and about $20,000 in federal. She now holds a BS in Philosophy from a very prestigiousÂ university with no job to speak of.Â Understandably with no income she has been unable to make her $300 monthly payment. But no worries, she can put those loans in deferment, right?Â Wrong.Â Had she known what she was getting herself into she probably wouldÂ have gone with another lender.
She figured since she was able to defer her federal Stafford and Perkins loans (you have up to three years of deferment time on federal loans)Â she’d naturally be able toÂ do the same with herÂ private loans,Â but that was not the case.Â The only deferment options available to herÂ wereÂ a 48 month in schoolÂ deferment and 36 month active-duty deferment for military personnel.Â There was no deferral benefit for economic hardship. Yikes!
Now she is in way over her head. Her debt is mounting, late fees are being assessed, her credit history is in complete disarray, and her co-signer is now being affected.Â Welcome to the world or adulthood.
When I asked April if there was one thing in particular she wanted me to be certain to convey in this blog she said, “Tell them to ask a lot of questions.Â Tell them to do their homework.Â Don’t be content to let the school’s FAO or a family member do all the work for you, which I did.Â Know YOUR benefits.”
Some of the most common benefits you will findÂ in the market todayÂ include:
- 12 Month Economic hardship deferment
- No origination, guarantor, or prepayment fees
- Exclusive 2% graduation reward based on your outstanding principal balance
- Rates as low as Prime minus 0.50%, based on credit evaluation
- Repayment does not beginÂ until six months after you graduate or leave school
- Co-signer release
The six monthÂ grace period and economic hardship deferment optionÂ are two of the most highly sought after benefits with the economy still on the mend.
So my recommendation is to heed April’s warning and pay close attention to the benefits extended to you if/when you take out a private student loan.Â It is far too easy to just scroll down to the bottom and click accept.Â Read between those lines.Â Sometimes it’s what you don’t see the first time around that can hurt the most.
Fore more information or to compare private students loans (click here).
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