Students' Loan - The Downside Of It

Students may get loans for their education and enjoy the benefits they provide to ensure their studies are completed as scheduled. Nevertheless, there are down sides to this arrangement that they may find unpalatable in the long run.

Getting such loans are usually easy and students most times don’t even care to go into details as to what is involved in the repayment. They later discover that their understanding of the whole package is not exactly what it is. Some discover they had rushed into getting the loan without first getting a clear picture of the terms of repayment. They definitely have to meet the terms as ignorance is not an excuse under the law.

One of the downsides is that certain factors are considered before one could access it. The income level of the parents of the student seeking the loan may be considered. Past financial records may also be considered. Whereby these are not good enough, it may affect the person seeking the assistance.

In addition, the repayment burden is much: the borrower is made to pay up to half of his monthly take home income thereby making his available at the end of each month very small. This invariably affects his purchasing power.

One other problem the borrower encounters is lack of consideration for him should he be befallen by a natural disaster or when he becomes disabled. He is made to pay back his loan irrespective of what has happened to him. The debt cannot be charged off in the bankruptcy process as obtains with credit card balances and mortgages.

The loans are difficult to extend as extending the repayment time would automatically lead to increase in the over all interest paid on the principal in the long run. Repayment may start as early as 6 months after completion of education thereby making it very difficult for the person to fully recover and save tangible amount of money after schooling.

In the event of a hike in school fees, the loan is also affected as the projection of the individual is changed. A hike in fees means that the original estimated period of recovering from the repayment is also extended. The individual groans under the repayment burden for a much longer period.

If the individual ends up not having a well paying job after education, it means it would take him a longer period to offset his debts as the amount he pays monthly is directly proportional to monthly income. It is therefore left for the individual to evaluate the terms of the student loans before agreeing to go for them.

Student Loans And How They Can Help Your Education

Student loans are monies provided either by the government or private sector to enable a student pay his tuition fees, buy his books and take care of other expenses while in school, especially if he has no savings to cater for these needs.

These loans enable one who would otherwise be unable to acquire former education as a result of poverty to go to school. They are however not free and must be repaid as soon as one completes one’s education and lands a job.

The advantage of the programme is that it enables poor students and those whose parents are poor to acquire standard education. It brings education to the reach of the poor and prevents it from being the exclusive rights of only the rich. It therefore provides succour to students who cannot afford to pay their fees from their pockets.

Besides, the student is not burdened with repaying the loan while still in school. It makes it possible for him to concentrate to study without the fear of having to be asked to repay his debt. It make it possible for you to take your studies, pay your rent and be able to feed yourself without having to look for other sources of getting the money to take care of your feeding.

Moreover, it ensures uninterrupted education. Since the debts are usually paid at the end of studies, students have the privilege to continue their education without dropping out of school as a result of their inability to pay their debts. The beauty of the whole package is that you are able to complete your education on schedule all things being equal.

Furthermore, the interest rate is cheaper than the other forms of loan. Since it is understood that the person collecting the loan is a student, the interest rate is usually pegged at least 2 to 3 points below other forms of loans.

The repayment is also spread out to make it less burdensome. You can conveniently offset the debt through a scheduled repayment system that allows you to pay a particular percentage of your income monthly.

Different countries have different procedures for acquiring the student loans and ways of repayment after completing your education. Generally, there are factors that are put into consideration before loans are given out to the students. The income level of the parents may be considered: the income level of the students may also be considered especially for those who already have a job before considering going back to school.