Paying off your student loans quickly can be beneficial to your financial health in many ways. In fact, some experts have even argued that not paying your student loans as soon as you have the money is one of the best ways to protect your finances. And while you may not get a lot of satisfaction with the decision you make, paying off your loans can help to relieve you from your debt. Visit https://www.sofi.com/private-student-loans/graduate-loans/ to get more information.
What Are Student Loans?
According to the U.S. Department of Education, there are 2 types of student loans:
Direct Loans: This type of loan is taken out by the government. In the case of a Federal Direct Loan, you are technically paying interest every month. Private Loans: These are typically taken out by private institutions or individual students and are not federally backed.
Both types of loans require you to make regular payments in order to keep the interest on your loan at a fixed rate. For example, if your interest rate was 6%, you would need to make a payment of $360 per month on a Federal Direct Loan.
The average federal student loan payment is $231.87 per month (prorated) and the average private student loan payment is $1,764.47 (prorated).
Your FAFSA Score
Your FAFSA score determines the interest rate you receive for your loans and determines which school you will attend. Since FAFSA scores are calculated on a scale from 500-850, there are a couple different ways you can evaluate your scores. If you know your scores by heart, then you should select an institution with a high enough score to assure you receive a favorable interest rate. However, if you are looking for the “right” score, you may find the following scoring method to be useful. You can see more details on how to calculate your score and how to determine your scores for more information.