Tag Archives | loan

Key Factors Students Need to Consider Before Choosing a Loan

Image by COD Newsroom, Flickr

Image by COD Newsroom, Flickr

Planning for your future is one of those phases of your life that needs careful consideration. There is a lot of money to be paid for your college program, and you might end up either not being able to pay for it or left with the option to drop out.

There are easier ways to pay for your degree through student debt relief funds. Students can easily fix a principle amount for each month and the rest of the formalities for interest rate and term plan of the loan can be decided by the program.

However, there are a few key factors which must be considered by the student before he/she chooses the kind of loan they’d like and begins to make payments:

Choose Your Loan Program Wisely

There are many debt loan programs for students to choose from. However, a student must carefully go through the terms and conditions for any loan program and choose wisely which program may suit his/her needs, whether federal, private or government grants – it can potentially make all the difference.

Any loan program varies according to specific needs and requirements for the student and whether he or she qualifies for the program or not. It requires research and planning before any student can say ‘yes’ to a loan program. Discuss among peers and friends who might have opted out of a loan program and learn from their experience.

Planning Ahead

Once you have selected your program and have successfully gone through the process, plan out each and every dollar spending of your loan wisely. Remember, every dollar that you spend will cost you twice the amount when you have to repay that amount. Only plan out your spending for your educational program.

Also, look for additional student support programs to be able to pay for your loan. Part-time jobs or paid internships always come in handy. Always calculate your remaining debt and make arrangements beforehand to be able to pay for it – you don’t want to be in a situation where you’ll have to abandon your college program. Only borrow what you need initially and decide on the expected time period for repayment on the basis of your monthly payments.

Make the Smart Choice

People reason that Federal Student Loan programs are much easier to select, depending upon their fixed interest rates, flexible repayment plans, income based repayments and loan forgiveness aspects as compared to private student loans. Every student is different, so make the smart choice by doing your research – and don’t be afraid to get some counseling through your college’s financial aid office.

This article was contributed by guest author Henry Kingston.

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How to Build Good Credit in College

Resisting the urge to open up a credit card at your favorite department store, paying for Spring Break with plastic, and the appeal of buying now and paying later is sometimes so tempting for college students. The truth of the matter is that while in college, there is an opportunity to begin building your credit so you will be able to buy a house or car once you graduate. You should never have to wonder if you’ll be approved for a mortgage or a loan because you have no credit history or you really screwed up your finances while in college. Take a look at our helpful tips and advice on how to build the most important score of your life with a student credit card. If you have any questions on what the best card could be for you to open to pay for things you were going to buy anyways, please contact us.

This article was contributed by guest author Matthew Coan.

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Government vs. Private Student Loans

Image by jessiejacobson, Flickr

Image by jessiejacobson, Flickr

With all the costs of post-secondary education, it can become very difficult to find the money to pay for it. Luckily, with student loans, students can more easily pay for university/college. There are two forms of student loans: government loans and private loans (i.e. personal loans and student lines of credit). Depending on eligibility, students have the option to receive either. So, how do you choose which loan is best for you? Here are a few factors that can help you differentiate and choose between the two:

Government Loans

Private Loans

Interest rate Fixed interest rate and often lower than private loans. Variable interest rate that can substantially increase your debt if rates increase.
Loan repayment Repayment starts six months after graduation. Repayment assistance programs are made available for students who may need it. Monthly interest payments while in school and regular repayment (principal and interest) starts a few months after graduation. Repayment assistance is dependent on the institution.
Reapplying for loans Must reapply every year and takes approximately four to six weeks for applications to be assessed. Usually, half the loan is given during the first term and the other half is given during the second. No need to reapply each year. Typically, only Proof of Enrollment is necessary and funds will be available shortly afterwards.
Parental involvement Your parents’ incomes will affect the amount of your loan. The higher their income, the less financial aid you receive and vice versa. Usually need a parent to be a cosigner/supporting borrower.
Extra Perks You will be automatically assessed for Canada Student Grants when you apply for a Canada Student Loan. Also, government loans differ province to province and territory to territory. Some offer both federal and provincial/territorial loans, while others only offer one or the other. More information and applications to each province/territory’s respective financial aid websites can be found below.

Depending on the institution, a lot of aid can be made available to students; much more than that offered by government loans. Here are some options available for Canadian students:

Here are some options for American students:

Final Thoughts

With all the perks of a government loan, why doesn’t everyone just apply for them as opposed to private loans? Simply, it is because not everyone qualifies for these loans or receives enough from them. Government loans are given on a financial need basis and have a limit. Use the Student Financial Assistance Estimator to see how much money you can receive from the Canada Student Loans Program. In the end, those who do not qualify and those who do not receive enough sign up for private loans.

With that being said, student loans are a great resource for your education, but try not to rely too heavily on them. Depending on how much you borrowed and the interest rate, it can take several years to completely pay off the debt. This can make it very difficult for you to achieve other financial goals.  Remember to be smart with your money and good luck!