Is Taking a Student Loan A Good Idea? Is taking a student Loan a good idea? Students can be said to be said not to be advisable except if you are working and earning a salary from school then you have the means of paying any loan after getting it.
But the fact you are a student having no source of income in school this might not be advisable for you to further. Let’s go deeper into this article to know if it is advisable or not.
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How Student Loans Works
To some extent, due to financial challenges or struggles. Some students are left with no choice but to go for a student to further their education to the extent they fully desire.
A student Loan is a sum of money given to a student from the federal government, probably from their state government or even a private company. Students who take this loan use the money for tuition or other school expenses. But the rule is that the money must be paid after graduation and it is paid with interest.
Student loan enables you to pay for your college and it also helps you with funds that help you to cover educational expenses. A student loan is helpful if only used wisely and responsibly. College students can apply for student loans and federal financial aid through free application for federal student aid or FASFA.
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Things to Consider Before Taking a Student loan
So many people want to take out and maybe later end up feeling stressed, when it is the due time for payment they go into more debt and stress. But am going to tell you ways you can take a loan and pay smoothly without stress.
- Compare financial aid offers: different offers would come in for you to take once you take your financial aid award letters.
- Borrow what you need: some students have a lot more that is beyond the budget forgetting the fact that they would need to pay the money. Before you go for the student loan you have to think of: what you need (that should be according to your college cost), your cost of living (this on how you will pay back when it is due), how much will your family put in to pay back the loan, and your financial aid award.
- Ask around about how the loan works and try following up on the instruction you are given. You can ask around by meeting up with a financial aid officer to know what to do. This is done to be able to understand the rules and requirements for applying for a loan. Funds are not always available so you should try to meet up before the deadline.
- Be sure of what you are signing up on. You don’t want the situation of getting to find out that what you signed up for is different from what you know. To be sure, try asking these questions:
- What is my monthly payment?
- Is the interest rate fixed or variable?
- Can I get a lower interest rate?
- What is the total amount of the loan?
- Are there fees to be paid?
- Consider getting part-time work: this is another thing you could consider doing after getting the loan. With this part-time work, you could cover some of your expenses and you would borrow less also.
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Alternative to Student Loan
There are so many alternatives to student loans if you feel that taking a loan may be too much for you. Then these alternatives are for you and we are going to talk about a few of them.
- Apply for scholarships: There is a lot of scholarships everywhere and they are available for college student. Unlike a loan, with a scholarship, you don’t have to pay it back. You don’t have to pay any monthly payments and you don’t have to graduate from college with debt. You can get a scholarship through different means: Educational institutions, Nonprofit foundations, Nonprofit organizations, and companies. If you want to apply for any need-based scholarship from your state or school all you have to do is to fill out the free application for federal student aid (FASFA).
- Grants: This is almost similar to federal student loans because of the need-based element. This is one of the alternatives based on financial needs given by federal government organizations, state governments, universities, and nonprofit foundations or organizations. In a lot of situations, we have noticed grants are given on a need-based, this is also free just like a scholarship.
- Work part-time: This is another alternative that relieves you of the stress of debt or loan. You can get a job on campus or off campus. Working from school can be tasking in, so you should try to look for a job that can correspond with your school activities. For example: if all your classes for the day end by 2:00 pm then you go to work by 4 till 8 and you are back, with that you use 30 mins to rest and the remaining to probably study.
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FAQ
What does a student loan do?
If you having a financial challenge to meet up for your college or university tuition, then a student loan is what you need. Student loan allows you to borrow money and pay it back but with interest. A student loan is different from a grant or scholarship. If you are given a grant or scholarship, you are not borrowing money.
Is getting a student loan worth it?
It is worth it for the aspect of getting your college or university degree. But it has the other part which is the part of the paying back burden that must not be forgotten. The only way advisable is to borrow less so you can pay easily after your graduation.
Are there penalties for student loans?
Everything or anything that has an advantage also has a disadvantage. There are disadvantages to a student loan. The disadvantage comes in when you miss the date of payment. The disadvantage could be added interest, higher fees, or wage punishment.
Do student loans hurt your credit score?
It does hurt your credit score. Your payment of the student loan will go on your credit report. Making a payment on time enables you to maintain a positive credit score. But if you fail to pay that will hurt your credit score.
How much a month is a student loan?
As of 2019, the normal payment for a student loan for those actively paying was between the range of $200 and $299, this is according to the Federal Reserve. But the monthly bill may be lower or higher than that.
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