Any student who would love to pursue a particular course in a college can always get financial assistance via a student loan. Although loans aren’t the greatest options, they actually are one of the fastest alternatives if you are looking for financial support to get a college degree. As a college student, there are lots of expenses that you need to address in your schooling. If your parents have a hard time with their finances, then getting a student loan won’t be such a bad option after all. However, there should always be a limit on how much you should get, especially when it comes to such type of loan. So, how much of a student loan is too much for every individual student?
According to BLS statistics, joblessness is at 12.5% because of the present economy. The most telling effect is that most of the graduating students every year, who’ve had used a student loan, are coming out of college with degrees that wouldn’t provide them a job. In short, they’ve spent their money, time, and effort on something that wouldn’t help them to get work in return. In case that sounds crazy to you, wait till you hear how much money they’ve spent on student loans just to finish their course.
Indeed, education is something that people can’t take away from you once you’ve earned it. Students have spent an enormous deal of effort, time, as well as money just to make it out of college and land a job. However, a huge percentage of the graduates every year doesn’t find a decent job to compensate for the investments they’ve made on their education. As a result, a growing case of unemployed graduates is on the rise. And what’s worse, most of these graduates are still paying their dues, mostly student loans. Normally, under the terms of your Master Promissory Note, you are given 6 to 12 months only after leaving school to pay your student loan. You should therefore limit the amount as you’ll take the brunt of paying it afterwards.
How Much Do You Really Need?
Common sense dictates that every student should apply for a student loan amounting to the total amount they need for their education. A student should not limit his or her loan due to the fact that he or she won’t be able to pay off the dues in the future. In fact, the experts encourage students to apply for a loan that would be enough to help them finish their studies. It would be illogical to get a small amount of student loan that wouldn’t support you financially through your college years. If that’s the case, then why bother getting a degree if you can’t finish the course because of financial issues? Experts highly believe that every student should at least get the amount they need, so that they can finish their course without worrying about their finances. Some believe that $20,000 to $50,000 loans are too much considering an average of $26,600 loan to finish a course. However, many also think that no amount is too much when the need for tuition, books and living expenses of a student is under consideration.
How Much Can You Pay on a Regular Basis
Applying for a loan is quite easy especially if you get a student loan. The hard part is when it comes to the payment. Most students have a hard time paying off their monthly payments which are mostly from their student loans. More often than not, the main reason why they have difficulties with their payments is because they get too much loan for their education. Although most experts encourage getting as much loan as you can, you should still consider your financial capabilities. What’s the point of getting a loan if you can’t pay it off on a regular basis? In fact, how can you get a house or a car in the future if you can’t afford managing your dues from your college years? One of the best ways to make sure that you won’t be financially stressed, is by making sure that the loan you get would allow you to pay on time on a regular basis. Some believe that your monthly student loan payment should not exceed 10% of your income to make it manageable.
Interest Rates and Fees
If you are planning on getting a student loan, always remember to shop around for the best interest rates and fees if out of federal guarantees or assistance. Aside from putting up less money as payment, you also free yourself from the stress you get because of your monthly dues. As a student, it’s very important to check out the interest rates and fees of the student loan to make sure that you won’t put up a huge loan on your back. After all, you’ll be the one paying up for the loan you’ve received for your education. So, make sure that you pick one that will actually help you financially and not the other way around.
When to Get a Student Loan
As a student, you need to know when would be the right time to get a student loan. You should only get a loan if you’re planning on taking a higher education or if you are having some financial struggles at the moment. But if your family is doing fine with their finances, then there’s no need to apply for such type of loan. It’s a lot better if you pay for your education instead of getting a loan. Aside from the fact that you don’t have to pay anything, you can also enjoy a stress-free college life. All you need to do is focus your mind on your studies to get an A at school.
When is a Student Loan too much?
A student loan is too much when you get a very high amount which will be used on extracurricular activities such as shopping for new clothes, hanging out with friends and other stuff not related to your studies. In most cases, these are the usual reasons why most students fail to pay their loans after college. Students should always consider the amount of money they get from a loan before they jump into applying for one. A smart student would always calculate and check his or her budget to make sure that he or she doesn’t get into trouble when he starts paying the loan.
Student loans aren’t bad options if you are in need of money while you are taking up your education. If you are planning to pursue a college education, perhaps it would be best to seek federal sponsored student loans first before applying with your school’s referred private lenders. Try other alternatives also, like seeking help from relatives if that is possible. It’s always better to get help from a relative especially from those who are financially capable of supporting your education. Aside from getting rid of the interest rates and fees, you won’t get too stressed as you’re not pressured on paying up after earning your degree or dropping out. Although borrowing money even from a relative or a friend isn’t easy, it’s always good to borrow money from someone you know. In case a student loan would be inevitable, just remember to put a limit on how much you should spend for a student loan. This will help you to avoid difficulty in settling the loan when your turn to pay starts.