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Category Archive: Student Loans
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Good debt or bad debt?
As long as credit is easy to receive, debt will continue to walk with us through life, taunting our every move and aggravating our very existence.
Some debt advisors state that the total amount of debt accrued per month in credit cards, loans, mail order catalogs etc., should not exceed any more than 36% of our gross monthly incomes. This is the maximum target level a mortgage lender will allow while assessing a potential borrower.
What is the best next step to take?
The secret to using debt to your advantage is to make sure that you buy assets which will increase in value. For example, a mortgage will allow you to live in a nice home with the hope of making a profit from it in the future. A student loan will allow you to study for a good job which will bring you many financial rewards.
Instead of using credit for profitable purchases like the above, most people use their cards to purchase everyday items which decrease in value the moment that they are bought, for example, food or clothes. If you do have to revert to your credit card for these goods, you should pay your total balance in full to avoid interest charges.
A credit card should never be used to finance a holiday as a holiday does not appreciate in value. Add to this a card with a high interest rate and you are dabbling with bad debt. An ideal debt to income ratio should not rise above 20% of an annual income when calculating personal loans, credit cards, utility bills etc. Figures that rise above this mark are likely to turn creditors away, even if payments are maintained.
Tagged Credit Card, debt, Debt Advice, Loans
Student loans: not as bad as they are painted
Student loans are a necessity for almost all students. And while starting your working life with a large debt is hardly ideal, student loans are one of the best types of loan available.
The APR of a student loan is the same as the rate of inflation. So effectively, the size of your debt never increases. If your debt at the end of your time as a student will buy you a small car, then after 10 years, although the amount of money may have increased it will still buy you a small car, as the price of the car will have increased at the same rate.
No other bank loan will have such a low APR, because the student loans company does not make a profit while all other loan providers must.
A student loan is the wisest debt to have if you must have one. After you graduate, it’s up to you to make sure you get the help and advice you need to get out of debt.
Tagged debt, Loans, Student Loans
Are Student Loans Evil?
Student loans are the spawn of Satan. I was unable to find a job after my studies were complete and I seem to have this huge loan hanging over my head. Because of the length of time that you are allowed to take the loan over it sits in the background until you are working and then bang your supposed to pay it back. I understand that the rates are favourable, there inst really a rush to pay it back but just knowing its there for so long makes me feel particularly nervous.
I like to be able to pay my own way, but a student loan was deemed to be the answers to all evils and wouldn’tt be any hassle at all. For me its just a big mill stone around my neck and its a stress that I could live without when I’m trying to find a decent job. In truth I never spent it on anything worthwhile, I borrowed more than I should of to pay the course materials and the day to day living and squandered more of it than I should of done. I am truly paying the price for it now.
Tagged Loans, Student Loans
Student Loans are Great
Student loans are definitely good: as a third year student its very hard to get through all the course work, hold down a day job and pay all your bills.
Without a student loan I would not be able to keep a roof over my head as I am studying away from home. I would not be able to afford the course materials and I would be eating pot noodles seven days a week rather the three days a week I am eating them just now.
I understand that I will have to pay it back one day, but by that time I will be in a good job with a reasonable salary and I will be in a position to do so. The long term nature and the low interest rate of the loan makes this an ideal way for me to get through my studies without putting myself into dangerous debt elsewhere.
Tagged Loans, Student Loans