Hi! I am Allan. I am here again to share my thoughts about one of the major finance issue of our lives with you. We all know education is one of the basic needs of human life and graduation is the first step toward a successful career. To become a graduate we study hard to get good grades which will help us to grab nice career options in future. There is another major issue we need to tackle to become a graduate. That is the fund required becoming a graduate and here our encounter begins with debt. Student loans are one of the major concerns for students.
I can tell you from my personal experience that most of us take student loans without knowing much of it. We are basically young and inexperienced about financial matter when we take up student loan. Therefore when the time comes to repay the loan we face many problems. Here are few way outs for a debt free life for students.
Know your student loan: This is the most important thing if you really want to become debt free. There are many kind of student loans available and don’t take just any kind of loan blindly. Read the loan related papers and documents to know the terms of repayment carefully. Government students loans are always preferable than private loans. As you will get more repayment option if you go for a government loan. Whereas if you take a private loan you get to pay the repayments as per the documents you signed.
Understand the jargons: Every industry have its own lingo and jargon which they use to demonstrate things. If you know those special term related to student loan then it will help you to understand the loan in a better way. This is very important to become debt free at an early stage of life. If you don’t understand the terms like deferment or forbearance then you cannot opt for these options during repayment of loans. These are the options which help you during financial hard times to postpone or stop paying repayments for a certain time period. Therefore try to understand the terms before you take up the student loan.
Plan your repayments: It will be wise decision to plan your loan repayment policy while taking up the loan. Few people opt for long term repayment policy such as 20 years repayment policy as they need to pay lower monthly instalment. Before you take any decision remember the longer you will take to repay your loan the higher amount you will need to pat as interest. So try to choose shorter terms to repay your loan and become debt free soon.
Loan consolidation: We basically take loans from different sources to gather the amount need for our graduation and then we jumble up in the time of repayment. Consolidation is an option to summarize all your assignment into one. So if you have already taken student loans and can’t repay all of them in correct order then you can go for consolidation option.
So here are my views to become debt free for young graduates. My views will appear here again on another finance topic which bother you the most. Wish you all happy and debt free life.