The Nitty Gritty of Culinary Student Loans

Are you planning to use a student loan to help pay for culinary school? If so, be sure you understand the basic dos and don'ts that can make using student loans a successful experience.

Unlike some forms of financial aid, such as grants and scholarships, you must repay culinary student loans along with fees and interest. Consider a culinary student loan as an investment in your career. As with any investment though, it is necessary to do some advance work to make sure you don't pay too much or make the wrong choice. Here are some tips on what to do, and what not to do, when obtaining a culinary student loan.

Student Loan Musts

These steps can help you get a loan you can live with:

• Prioritize federal over private loans. Federally-guaranteed loan programs offer special advantages, such as a lower interest rate. For subsidized federal loans, available for students with demonstrated financial need, the federal government pays the interest while you are still in school. Private loans are also an option, and may be necessary after you have exhausted other possibilities, but expect them to be more expensive.
• Compare lenders. Interest rates are always changing, so the best way to be sure you are getting a good deal is to compare rates and terms from different lenders.
• Read the fine print. Taking out a loan is an adult decision and you need to approach it in a businesslike way. This includes taking time to read all the fine print and asking questions about anything you don't understand. Take the documents home with you to review before signing, so that you won't feel pressured.

Student Loans: What Not to Do

Here are some things to avoid:

• Don't borrow more than you can repay. Keep track of what your monthly payments will be and make sure this falls within the budget of your expected earnings.
• Don't sign on for prepayment penalties. Be wary of any penalties for early repayment of a loan. You want to reserve the right to refinance and/or consolidate loans at a future date.
• Don't take borrowing lightly. Repayment of these loans may seem far off in the future, but you need to take the process seriously. Your culinary student loans can be an important first step in establishing your credit history.