Everything has its pros and cons, right? Although at times, the pros might outweigh the cons. People who wish to school keep increasing daily, but finances never stop meddling to avert their dreams which is so painful.
Nevertheless, a student loan has come to bridge the gap between going to school and staying at home as a result of insufficient funds. The frequently asked question is “Is taking a student loan bad?”
If you are with that question above, be rest assured that in this blog post, you will be enlightened to the types of students loan we have and the pros and cons of students loans. We want the best for you and this blog post is to help you decide before applying for a student in 2024.
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What is a Student Loan?
Student loans are money borrowed by a student to be reimbursed at a stipulated time with an interest. This loan is often borrowed by the majority of college students before graduation to wrap their college costs, although to be able to repay this money, a side job is taken up by most of them.
Would you love to take a student loan, but you would love to know the kind of students loan available? Let us take this ride together.
Types of Student Loans in 2024
There are three types of loans that can be taken by college students. They are;
Federal Loans
Federal loans can also be called government student loans because they are loans given by the government and it is the cheapest accessible loans for students.
Private Loans
This is an alternative students loans provided by banks and other financial institutions to students. To get this loan, you must have a cosigner as well as a non-citizen status.
Refinance Loans
This is the type where after graduating with a good credit score, your loans increase rate can be reduced as well as a scheduled repayment or a loan paid off by a private lender.
Now, let us dive into the pros and cons of student loans in 2024.
Pros and Cons of Student Loans
Pros
It Helps You Afford a College Education
When the college of your choice is too expensive and help seems not to be forthcoming from anywhere, student loans are the next available option that helps you get into the college of your choice without compromising on a lesser school that does not interest you
It Builds a Credit Score
Student loans give you the ability to build your credit score which helps you later in life when sourcing for apartments, applying for jobs, mortgage, or looking for a credits card in as much as your student loan was used responsibly and paid monthly.
Available for All
Students loans are readily made available for vocational, undergraduate, graduate, and professional school, all that is required is to fill out the Free Application For Federal Student Aid which has no fee attached, that is if you are applying for federal student loans.
The private loan requires you to fill out an application as well as meet up some score requirements (income and credit score requirements) which vary by lender.
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Ability to Finish College Faster
Some students stay back at home to work and then proceed to college later after making money, oftentimes, college does not become visible again because it takes years to save enough money for college. However, with a student loan, you can proceed to college, graduate faster, and then get a good-paying job.
Multiple Repaying Options
To repay, there are various modes of repaying, it could be through Income-Driven Repayment, withdrawing from your card monthly, etc. Whichever model works for you.
Cons of Student Loans
It can be Expensive
When you have to repay students loan, it is with interest and this interest makes it very expensive. Although, federal loans are much cheaper than private loans.
It is a Burden to Pay Off
Most times, it becomes difficult to pay off student loans and this leaves so many people depressed as it might look like your world is crashing if you can’t pay it off considering other bills that are piled up.
It Makes You Start a New Life in Debt
There is always a life after college, however, if before graduation, you are yet to pay off your student loans, you’ll be moving into your adult life with debt and this might be difficult to pay off because it is not easy to find a good-paying job that can repay your student loans as well as give you access to a decent life.
It Makes it Impossible to Finance Other Goals
Having huge student loans to repay might hinder you from saving, starting a business, a family, buying a home, or other important goals because you are all after getting the student loans cleared.
SEE ALSO: Subprime Home Equity Loan – All you Need to Know
Conclusion
Applying for a students loan can be a great offer, however, it is important you find out about the pros and cons before applying for one. Find out about the interest rate, weigh your income and check if you’d like to take the risk.
Although, it is available for all and makes it easy to finish college faster, are you ready to start a new life in debt? Are you ready to sacrifice other goals while you take on the burden of loans? You should take up a part-time job at your school to make repaying easy.
There are numerous pros and cons of student loans, if you know any not listed here, kindly mention them in the comment section for others to learn.
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