The True Cost Of Taking Out A Student Loan

So you’re a student trying to pay your way through schooling. This can be very expensive, especially if you’re having to do everything by yourself. Some of you may be lucky enough to get a scholarship, or have a very supportive family who are willing to help pay your way through school. Or maybe you managed to build up your own savings account early on in life.

Regardless of your situation, it’s still going to cost you, and the easy option when things get tricky is to take out a loan.

While many people do this, it’s very important to know exactly what you’re getting into before you commit.

Here’s what you need to know.

Interest rates can be ridiculously high

Interest rates are never that appealing to begin with, but they tend to be much higher with student loans than any other. This is all down to the age group, the same way car insurance for new, young drivers is double – sometimes even triple the amount than what it would be for a middle-aged person.

A lot of federal student loans now have fixed rates, which is good because you’ll have a basic idea of how much you’ll be paying every month. Having said that, the annual percentage can still end up changing every year, so it’s important to keep your eyes open for that. A two percent difference doesn’t sound like an awful lot, but that can amount to thousands of dollars as the years add up.

They don’t just disappear

While certain types of debt can be dealt with if you file for bankruptcy, student loans cannot be managed this way which means regardless of your financial situation, the problem won’t go until you have paid everything back.

This is because the law is very vague regarding student loans, so even if you try and take the problem to a higher power, you’re essentially just leaving the decision based on the court. On very rare cases you may get lucky, but nine times out of ten you’ll be left having to scrape pennies out of your piggy bank until you’ve paid everything off. To avoid this from happening, you can enlist the help of companies like debtsettlement.co who aide you by assessing your situation and giving you a final loan that will pay off all of your existing ones.

They’ll hold you back

Over fifty percent of students all confessed that they are still choosing to live at home with their parents because they don’t have the finical freedom to be able to move out, meaning you could end up finding yourself stuck at home for another two or more years because of your existing student debt. Not only that, but your future in general may have to take a back seat, because you may not be able to afford what you’d originally hoped for. This could be anything from getting married, starting a family, and taking an early retirement. Even though these things may seem miles and miles away, it’s important to think about what you want, because being stuck in debt for years on end can really affect those dreams and ambitions. Look at how to save up for your future on time.com.