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Monday, March 18, 2024

5 Important Things To Consider Before You Take A Student Loan

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[dropcap]L[/dropcap]ife in general is a struggle. Getting a university or college degree isn’t a piece of cake either. Certainly not when you have to take out a student loan. You have to do a great deal of research so that you don’t settle for the wrong loan refinancer. Resist the temptation to simply type ‘Where or how to get a student loan’. An internet search will only leave you overwhelmed with an endless list of possibilities.

It’s all right to scour the World Wide Web for viable financial institutions, SMEs and Fintech Companies. But students should be careful to choose wisely. From the statistics of student loan debts, it is obvious that these offers don’t often go as envisaged. Take time to get the opinion of a student loan expert. Do not settle for the first company that pops up on your search engine results page. Ask the right questions. How much money can the company loan you? What is the interest rate? Should you choose commonbond vs laurel road? Will getting this loan be in your best interest?

In this article, we will list and explain the five most important things to consider when you are trying to choose the best lender to sign a contract with. Choosing the wrong loan company can jeopardize your credit ratings and ruin your dreams to get a college degree. The lender evaluation tips on our list are based on research findings, expert advice and real life experiences.

1.  Adequate Research and Information Gathering

Before you sign those dotted lines, ask yourself if you have gotten every crucial detail and information regarding the loan. Many students make the mistake of not evaluating the loan package. Such careless students pay an expensive price. If you don’t understand the information that has been provided, consult an experienced and reliable student loan consultant.

Although taking a student loan can help you achieve your dreams of graduating from your dream college, it can also place you in a terrible position. Don’t forget to ask the following important questions:

  • What are the available repayment options?
  • What are the interest rates?
  • Is there a period of grace?
  • What is the amortization term?

And so on.

2.  Can You Repay The Debt?

The last thing you want is to end up a perpetual debtor. Don’t take a huge student loan you aren’t sure you can pay for. Experts often advice that students take out a small loan for their tuition and other important fees. They also advice students to get side-hustles from where they can earn money for other basic expenditures.

Before you accept that juicy loan, think about payback time. Consider the interests too. Picture your future. You’ll need to get an incredibly well-paying job to help you offset the costs.

A BBC correspondent once released a report that detailed her experience with repaying her student loan. Ever since she joined the BBC, the loan company had been deducting a percentage of her monthly salary. It took her 7years to pay off her $12,000 loan. She heaved a sigh of relief after the last penny had been deducted.

Studies revealed that most bachelor degree holders require up to 21 years for repaying their student loans. Twenty one years is a life time. So before you accept that loan, think critically..

3.  Evaluate The Risk Involved

Believe it or not: taking a loan is a risky venture. We can’t see the future and so there is no way to tell how things will go.

No sane person would and to spend the rest of their days paying off a loan. Life is too short to be lived as a debtor. Before you sign that contract, ask yourself if that university degree is really worth the stress of repaying the loan.

Weigh the risks. Your university degree is expected to increase your chances of earning a decent salary, but sometimes, life doesn’t work that way. Do you really need that student loan? If you’re certain of the financial benefits you will gain after graduation, then take the risk. After all, student loans are for promising individuals who have no other way of paying their school fees.

4.  Loans Aren’t Compulsory

Many students make the mistake of assuming that every student must take a loan. Before you finalize things with a lender, ask yourself if you can afford the fees for the following:

  • Tuition
  • Hostel or off-campus accommodation (On campus accommodations cost significantly less than off campus living quarters)
  • Basic needs (food and clothing).

If you can afford all of the aforementioned items, then you really don’t need a student loan. A ide job is what you need. Working a few hours a day will help you raise more spending money.

Cut your coat according to your cloth. Don’t try to compete with or impress the rich kids. That’s not why you’re in college. You are there to gain knowledge, skills and exposure. Learn to supplement your income through other less risky means.

5.  Your Financial Management Ability

It’s one thing to get a student loan. It’s another to know how to spend it wisely and judiciously. Many students take out a loan even when they don’t have a concrete plan for every penny. Before you consult your lender, ensure that you have a foolproof plan for the money. Resolve to spend the money on only academic fees. Don’t use your student loan for a car or a shopping spree.

Rounding Off

A student loan can make you dream of getting a university degree come true, but you have to do your homework else you’ll be in a dilemma. Evaluate every lending option before you settle for one. Save yourself from a life of misery by considering the right factors.

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