Common sense tells some of us that loans are bad, just from past experiences of our parents or other adult figures in our lives. However, for the other 44 million risk takers it may look like opportunity.
An opportunity to have extra money, more clothes, vacations and a beautiful bank account … for the moment.
Of course, many college students have no other option than to take out a loan due to a lack of financial aid and/or other contributing circumstances, but the key words I just used were “no other option.”
Loans should be used as your very last resort when you’re in great need of funds, whether it be for school or personal use. Loaners, specifically universities and colleges, are always extremely generous when offering advances. Don’t let them hoax you.
$5,000 sounds amazing in the moment they offer it, but six months after you graduate that money is due. Need an extension? No problem, you’ll just owe more than you borrowed.
I’ve come across a handful of students who are so excited to borrow a ton of money from their university and their explanation for the loan is, “I’m going to be in debt anyway,” or “I’m going to be rich when I become a doctor. I can pay it back.”
Don’t be one of these people.
In the long run, these unnecessary loans can be detrimental to your credit score and even prevent you from being able to receive finances when you actually need it.
Need more? Here are five examples of acceptable loans:1. Paying for college classes
Apply for at least five scholarships first.
2. On the verge of being homeless
3. NEED a vehicle
Don't exceed $5,000.
4. Summer Classes
One or two classes only. Financial aid is rarely offered to anyone during this time.
5. Investing in your business/future
A start off loan, but don't exceed what you can't return.
Here are five examples of bad loans:
1. Paying another loan
Don't borrow and borrow to pay someone else. You'll still be in debt.
2. Upcoming vacation
3. Newer/better car
Keep your current car until it falls apart. Literally.
4. Braces/bigger butt/new boobs
Save your own money for this!
