The Top 5 Student Loan Mistakes You Must Avoid | The Odyssey Online
Start writing a post
Adulting

The Top 5 Student Loan Mistakes You Must Avoid

Student Loan Mistakes

100
The Top 5 Student Loan Mistakes You Must Avoid
https://az616578.vo.msecnd.net/files/2018/02/28/636554153305238075788037567_sad-student-sitting-on-stairs-college.jpg

It may surprise you to learn that student loans are only behind mortgages as the prime sources of consumer debt. Much like mortgages, mistakes can have pretty significant consequences in the future.

As we head towards what will be a major factor in our future success, we sometimes ignore how important it is to plan ahead for when we graduate. With so much work to be done prior to heading for campus for the first time, it can be easy to ignore any additional stresses. The good to thing to know is that there are numerous resources available to help you make your decision. For example, you can check out these finance blogs which cover personal finances and help you manage your money. Failing to prepare is preparing to fail, after all.

When it comes to student loans in particular, there are many areas which you should be aware of prior to making any decision.

Don’t make these following mistakes:

Not Borrowing Sensibly

There is a distinct difference between what you need and the amount you could get. For many students starting college, there is a tendency to get carried away with large sums. However, it is important to remember that for every dollar you borrow, it will cost you near enough two dollars to pay back.

Instead of borrowing to the absolute limit, number-crunch on the cost of college bills and pick up some part-time work or find out about tuition instalment plans as a sensible alternative to excessive spending

Using Student Loans for Everyday Expenses

If your studies and adjustment period has tempted you to splash out on some new threads, treat yourself to a new laptop and feast on Japanese food and steak, take a step outside yourself and think. A Student loan is designed for tuition and course materials, so spend wisely.

Splashing out early and without consideration will soon see your trips to ATM gradually decline in frequency until your bank balance is no longer your friend. Be extra careful over the holidays!

Failing to shop around

It is your right to choose the type of loan you want. Use comparison sites or simply compare each interest rate and set of terms against one another before making a decision on the lender to go with.

Each lender will offer their own terms and rates depending on your status and situation, so choose wisely.

Dismissing Federal Loans in Comparison to Private Loans

Federal loans are generally cheaper than going private. Despite the pretty packaging and incentives private lenders will offer, the devil, they say, is in the detail. For example, Federal loans allow three-year deferments in contrast to the alternative of a total of one year, should you go with a private loan. Federal student loans also trump private loans with additional features such as income-assessed repayment/loan forgiveness.

Taking the lowest rate available

Many times when you opt for the lowest monthly repayment, you will find that the repayment term will be longer. There is also a greater chance that the interest rate will be higher. If you would rather plan for a better deal, consider other options.

You may find that you can also use the services of lenders who offer a reduction on your interest rate if you sign up for auto-debit with your bank. As many lenders charge for missed payments and for manual payments, you can potentially save the money you forfeit for a shorter term in this way. If you opt for the student loan interest deduction when completing your federal income tax return, you can also claw some money back.

Think wisely. It’s your future.

Report this Content
This article has not been reviewed by Odyssey HQ and solely reflects the ideas and opinions of the creator.
Relationships

Power of Love Letters

I don't think I say it enough...

443012
Illistrated image of a letter with 2 red hearts
StableDiffusion

To My Loving Boyfriend,

  • Thank you for all that you do for me
  • Thank you for working through disagreements with me
  • Thank you for always supporting me
  • I appreciate you more than words can express
  • You have helped me grow and become a better person
  • I can't wait to see where life takes us next
  • I promise to cherish every moment with you
  • Thank you for being my best friend and confidante
  • I love you and everything you do

To start off, here's something I don't say nearly enough: thank you. Thank you, thank you, thank you from the bottom of my heart. You do so much for me that I can't even put into words how much I appreciate everything you do - and have done - for me over the course of our relationship so far. While every couple has their fair share of tiffs and disagreements, thank you for getting through all of them with me and making us a better couple at the other end. With any argument, we don't just throw in the towel and say we're done, but we work towards a solution that puts us in a greater place each day. Thank you for always working with me and never giving up on us.

Keep Reading...Show less
Lifestyle

11 Signs You Grew Up In Hauppauge, NY

Because no one ever really leaves.

16470
Map of Hauppauge, New York
Google

Ah, yes, good old Hauppauge. We are that town in the dead center of Long Island that barely anyone knows how to pronounce unless they're from the town itself or live in a nearby area. Hauppauge is home to people of all kinds. We always have new families joining the community but honestly, the majority of the town is filled with people who never leave (high school alumni) and elders who have raised their kids here. Around the town, there are some just some landmarks and places that only the people of Hauppauge will ever understand the importance or even the annoyance of.

Keep Reading...Show less
Lifestyle

Moana's Top 10 Life Tips

"Moana" is filled with life lessons that involve far more than finding true love as many other Disney movies do.

41520
Animated image of a woman with long dark hair and tattoos
StableDiffusion

1. It's easy to be fooled by shiny things.

Digital image of shiny gemstones in cased in gold. shiny things StableDiffusion

Tamatoa created a liar filled with shiny things simply for the purpose of tricking fish to enter and become his food. He too experiences a lesson in how easy it is to be tricked by shiny things when Moana distracts him by covering herself in glowing algae so Maui can grab his hook.

Keep Reading...Show less
Student Life

7 Types Of Students You Will Meet In College

You wish you could be #5, but you know you're probably a #6.

21227
cool group of lazy college students in class
StableDiffusion

There are thousands of universities around the world, and each school boasts its own traditions and slogans. Some schools pride themselves on sports, while others emphasize their research facilities. While there is a myriad of differences among each and every school, there will always these seven types of students in class.

Keep Reading...Show less
Featured

15 Rhyme Without Reason Greek Life Function Ideas

When you have no ideas for what to wear to this date function

321668
A dog and a frog
Healthy Pets

I am going to a rhyme without reason date function and I have looked at so many different rhyming words and I figured there need to be a new list of words. At these functions, there are usually at least two rockers and boxers and an umpteenth amount of dogs and frogs. I have come up with a list of creative and unique ideas for these functions.

If you like what you see, get a shopping cart going with these costumes.

Keep Reading...Show less

Subscribe to Our Newsletter

Facebook Comments