Before Repayment Is Due
When loans are received, often times there is money left over after paying for tuition, books, and supplies. That money that is left over is considered to be money for your living expenses during the term. If you need that money to cover your needed living expenses, then by all means, use it. If you do not need that money for your absolute needs for living expenses, it would be prudent to either take the left over money and pay it back on your loan or put it away in a savings account.
If you are able to not touch the left over money except for in emergency cases, then put that money away. Since the loans are not due until after you complete your education, you might as well invest it wisely and generate some interest. Once you have completed your education, then you can withdraw the money and pay on your loan. If need be, instead of making a lump sum payment, you may want to have that money set aside so that you are able to make monthly payments for as long as the money lasts.
Stay On Top of Things
Keep detailed records of your loans. Knowing where your loan is being managed and how much you have borrowed is important upon completion of your program. These documents may not seem important when you are active in school, however the lenders do want to have their money as soon as possible after you graduate. Knowing about the types of loans and who you are dealing with can help to relieve some of the headache when it comes time to pay back the loan as well as to manage your loan.
After Repayment Is Due
The most important thing to remember is to stay current on your student loans. Staying current does not always mean paying on time every month. This can also mean that you communicate with your loan carrier if you need to have the loan deferred. If you find yourself in a situation where you are not able to pay, call your lending institution immediately and make the proper arrangements. In most cases, they are more than willing to work with you.
Tax Benefits
It is important to note that there are tax benefits available to you. There are deductions that you can make while you are a student that can help to defer some of your tax liabilities. Not only that, when your student loans become active to pay on, you are able to use that as a deduction as well. Make the most of these deductions and if you receive money back because of it, make sure that you put that money directly to your student loans.
Staying informed about your loans as well as keeping the right records will help you to navigate through the process upon completion of school. Be creative with the money that you do receive in excess of what you need as well as on your tax returns to help to defray the costs associated with repaying those loans. Being proactive and staying on top of things will help to reduce the stress associated with this financial responsibility.
Neil Davis is a tax consultant and in his spare time blogs for workingtaxcreditcalculator.co.uk a site which can help you with their tax credit calculator so you can find out how tax credit changes 2012 effect you!
