As much as there is uncertainty about what the outcome will be, student loans are still an option for many of our youth. As a result, the majority of graduates and young professionals start their careers with study loans to pay off. Debt can be both good and bad, however, it is pivotal to manage your expenses according to your lifestyle, as debt will always be a worrying thought. The best thing you can do is to educate yourself on how to manage your finances, reduce your debt and pay back your student loans in a timeous manner.
Below are a few tips about student loans that you should be aware of:
When selecting the appropriate student loan deal, there are two types of student loans to choose from:
When choosing the option that suits you best, you should investigate all options and select one which best suits your needs and corresponding interest rates. If you are a full-time student not living with your parents, it is advisable to use your student loan to pay for tuition fees, books, equipment and accommodation. This will take strict budgeting and discipline.
You will need to make a new application for your student loan for each year. So check all the conditions and ensure that you continually comply. Loans are ‘grown-up stuff’ and you would not want your finance to be withdrawn on a technical issue.
Remember that a surety (something/someone that will take on your debt if needed) may have to apply on your behalf if you are a full-time student without a current income. That surety would need a disposable income and a clear credit history.
The truth is that a student loan is not to support a high standard of living, and you may not be able to afford your standard of living after graduation. It is therefore a mistake to take out a student loan without considering all the implications involved and reading the fine print carefully. It’s unfortunate that most young people don’t think enough about the implications of their loans. To a large extent, your future career will influence the decision you make on the amount of the loan you should apply for. When taking a loan, bear in mind that you will need to continuously monitor your loan and strive to minimise your debt, avoid incurring unnecessary debt. But if that means dropping out – or not enrolling for the next year of studies to complete in any courses, then taking out a loan will be a good decision to make.
Confidence in repaying debt is key to learning how to be the master of your money. Believe you can pay off the loan and find a way. There is opportunity everywhere; speak to your financial services provider to explain the interest on your loan and how they vary. The value of acquiring tertiary education is well worth the commitment to invest in a student loan.
The Don’ts:
The Do’s:
Keep in mind, the main reason you invest in a student loan is to finance your tertiary education, typically repayable once you graduate. Loans need to be repaid over a 5- to 10-year time period. Be sure to budget for your student loan repayments from your first salary.