Student loan considerations to make

For college or postgraduate students looking for financial flexibility in pursuing their education, a student loan is a popular alternative payment solution. It can help manage finances better while studying and can help achieve a less stressful journey in reaching for your dreams because it covers the financial matter needed in your chosen field. But just like any kind of loan, this is a huge responsibility to bear after graduation. Therefore, it is best to consider some facts and note of the few tips before taking out a student loan.

If you are considering pursuing your college degree through a student loan, there are important things that you should consider before you dive into a major life decision.

Understand different types of Student Loans

A borrower has two options for student loans: federal and private. For an undergraduate student, it’s advised to exhaust federal student loans first. These loans that are issued by the federal government have lower interest rates than a private student loan.

In a Federal Student Loan, Congress decides on the yearly interest rate. This type of student loan is flexible with payment method linked to income upon employment and loan forgiveness can be given under certain circumstances. However, Federal student loans have origination fees of 1.057% and PLUS loans carry a fee of 4.228% and they also have borrowing limits for undergraduates.

Private Student Loan, on the other hand can be availed from banks and other financial institutions. This type of student loan is harder to get because a student must present a proof of ability to pay either in a form of a good credit score or with a co-signer to be able to qualify. Interest rates for private student loans are also higher, around 3.73%. It is important to note that private student loans aren’t included in most forgiveness programs, so be a responsible borrower to avoid bigger problems.

Choosing the best type of student loan that you think will perfectly serve you is part of decision making. Not all federal student loans can cover most of your financial requirements, therefore you might need several private institutions for your student loan. For more details, consult with your school’s financial desk assistance and request from them their preferred lender list.

Want to know more about student loans? Visit here.

Know your repayment options


Your career path may influence how much money you might make after college. Your future salary is your basis for your repayment options. Many college students who avail student loans don’t realize this until they are already finished and are about to start paying back the loans.

There are several options borrowers can choose to repay their loans, like loan forgiveness programs and plans based on income level.

An income-driven repayment plan is based on your loan and financial situation is designed to make loan payments more manageable based on your income. It allows borrowers to pay somewhere between 10% and 20% of their discretionary income toward their student loans each month.

On the other hand, loan forgiveness programs which is offered by the state may forgive a portion of loans if graduates enter jobs where qualified individuals are needed.

Another option available is the Public Service Loan Forgiveness program offered by the federal government to students working in public service jobs.

Making good research in order for you to forecast your possible income from the job that you are eyeing on will provide you an idea as to how much you should loan and your capability to pay in the future. Be realistic in the amount that you can borrow and be responsible in paying off your student loans. Remember that failure to pay due to bankruptcy is not an option when it comes to student loans, meaning the granted loan will remain unless you are able to pay in full.


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