If you browse social networking websites and other relevant forums, you will frequently hear about people who graduated using student loans and now have a debt that will take a lifetime to repay. Frequently, you hear people grumble about how hard it is to repay student loans and how the system is rigged against the students to have to bear the brunt of the system. Although the various nuances of student loans including capitalized interest student loan can be debated for hours on end, there are people who manage to beat the system and pay back the loan in due time.
How do they do that? There is no trick to it. No hidden tactics exist that would decrease the loan principal or the interested accrued on it. The only way of minimizing the debt and paying it off as soon as you can is by understanding the rules and following them to the word. Never let the loan agency fine you for any late payment and you will be able to pay back in the minimum stipulated time. Once you enroll in college, your main focus should be to completely pay back the student loan in order to settle in life.
Student loans are a lot more flexible than most other kinds of loans. These loans are designed in a way that will enable you to pay the full fees of tuition and continue with education regardless of whether you can pay back the interest while you are in college or not. However, this option should be availed ONLY if you have no other option and are sure that you will be in a state to pay back a higher loan interest.
In technical terms, it is better to pay the interest as it accrues (accumulates) rather than apply for deferment or forbearance in order to pay it after college. While the interest is a small amount when paid in due time, once you defer the payment, it is added to your principal and is called capitalized interest student loan. Thus, with time, your capitalized interest student loan will increase exponentially since your interest will now be calculated on the added principal.
Understanding the terms and rules of your student loans and sticking to them will save you thousands of dollars over the course of repayment and will help you get rid of the debt sooner. There is no doubt it is difficult, but with proper amount of planning and focused effort, you will be able to make it!