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7 Deadly Student Loan Sins

We all know that higher education is expensive, but we also know the professional and personal growth it can provide. For many people, going to college means taking out student loans, a serious credit product that shouldn’t be entered into lightly.

It’s a good idea to calculate the monthly student loan payments you will owe before you even take on the debt  so you can make an informed decision about whether you can afford the debt. Signing on for student loans before fully understanding them is a major student loan mistake, but it’s not the only one you can make.

Here are some common student loan mistakes — forewarned is forearmed, right?

1. Overlooking Loan Alternatives

While student loans may seem like a necessary evil, there are other options to afford college. You can choose a cheaper school (think in-state or online), attend a work-based school, attend school part time while working, put off school for a year to save up or apply for scholarships or grants. You can even do a combination of all these options. Even if this doesn’t completely eliminate your need for student loans, it can reduce how much you have to borrow.

2. Borrowing More Than You Need

You may be tempted to take out student loans for the full amount you’re offered, but it’s a good idea not to borrow more than you need. Instead of using the money beyond tuition and room-and-board for parties or clothes, it’s important to weigh what you really need. Then you can avoid paying interest for years on that spring break trip!

3. Neglecting Research

You may think heading to the bank or another private student lender is the first step when it comes to getting a loan, but federal student loans typically have lower interest rates and more consumer protections. No matter which route you go (and you may have a mix of private and federal loans), it’s always a good idea to shop around for the best interest rates and terms. You also want to know who services your loans, what programs they provide and how to access your statements.

4. Choosing the Wrong Repayment Strategy

Lenders will likely offer you several repayment plans for your student loans. Which one you choose can have a significant impact on the length and total cost of the loan. Some may have you paying more each month but less overall, while others will keep the monthly payments low but you’ll pay more in interest over a longer term. Standard plans are usually paid down in 10 years, but feature higher payments than the graduated or income-based plans. It’s a good idea to think about your career projections, what you will realistically be able to afford and how you prefer to repay loans.

5. Ignoring Prepayments

Even when you are still a student, you can put a serious dent in your student loan payments. This is usually penalty-free. With just a little bit of cash each month, you can help reduce your debt. You may want to consider taking on a side hustle, turning your hobby into cash, finding a paid internship, tutoring, participating in paid research, freelancing your skills or looking for a work-study opportunity on campus in order to do this.

6. Missing Payments

When you take on debt, you are also taking on the responsibility of getting organized and keeping track of what you owe. Paying late or missing payments can put you at risk of defaulting and can ruin your chance of qualifying for loan forgiveness in the future, in addition to wreaking havoc on your credit score. It’s important to plan ahead of time to ensure you pay in full, on time, every month. You can see how your student loans are impacting your credit scores for free on Credit.com.

7. Underestimating Interest

When you are given monthly payment options, it’s a good idea to also make sure you look at the total cost over the life of the loan, as well as possible tax implications. A smaller amount may fit more easily into your budget but leave you paying a lot in interest over time.

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This article originally appeared on Credit.com.

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