A student loan is a type of loan formed to help students pay for post-secondary education and the associated fees, such as tuition, books and supplies, and living expenses. The interest rates on student loans are usually much lesser when compared to other kinds of loans, and the repayment scheme is a little less strict, keeping in mind that the students are still in school while they repay the amount due. Here is a list of important pointers to be kept in mind while getting a student loan:
Two kinds: Student loans can usually be classified into two broad categories- federal or private. A federal student loan is the one that is entirely funded by the government, and a private student loan can be attained from a bank or a financial institution.
Interest value: It is very important to decide the period of repayment wisely. If one takes a short period to repay the loan, the amount of interest they will have to pay on loan will also be less. The longer the period, the larger the sum of interest becomes.
Auto-debit: Once you take a loan, you obviously want to get rid of the hassle of repayment as fast as you can. For this purpose, you can link your account and have it auto-debit the amount of repayment every month. This makes the repayment process fast and easy. The only time you should not consider auto-debit is when you are under a large budget restraint.
Scholarships: It seems very hard to get scholarships with the competition around, but it is not impossible. It is not necessary to get a full scholarship, even the smaller amounts help. One can apply for a partial scholarship and cover the rest of the fee with the help of a student loan.
Refinancing: Refinancing is the process of attaining a new loan to pay back old and unpaid loans. If you are lucky enough to find a loan with a low-interest rate, your debt amount could reduce by a significant value.