What You Need To Know Before Taking a Student Loan

When someone is looking to go to college, he or she and the parents worry more about two things i.e. the profile of the college and course to be undertaken while completely disregarding one crucial factor i.e. the cost of going to college. Due to the availability of student loans, many think that the cost of going to college is no big deal but it’s only after graduation that reality will strike (when a student graduates with thousands in debt). It is for this reason why it’s important for parents and students alike to think long and hard about the cost of going to college before settling for one. Note that while at the college you can earn extra cash by simply placing online bets at NetBet.

In the process of considering the cost of going to college, parents and students alike ought to take the following into consideration.

Know the Cost of the Debt

Taking an option to refinance student loans should be a decision that both the student and the parents would think about collectively. The rule of thumb when it comes to college loans is that one should take a loan which equals or is slightly less than the expected first year’s salary. To get the expected first year’s salary, students can look out for salary surveys online for the job they intend to work in after graduating. Get the expected annual salary and you know the exact amount you have to take in student loans. It’s great working with this rule as you will realise that when it comes to repaying the loan, you will just be paying a reasonable amount over the four years (expected time to pay back in full the student loan).

Start Looking for Alternatives Early

Most students including parents leave it late when it comes to the issue of college funding. On many occasions, students will start taking action when they are in their senior year or even after graduation. The problem of leaving it late is that students automatically fail to benefit from other alternatives such as grants and scholarships. If however, the student can start looking for funding early, he or she will stand a better chance of earning a scholarship or a grant. These alternatives are actually great than student loans as they don’t come with the burden of repayments. Just note that you do not have to be overly optimistic with grants and scholarships as only a few number of students receive funding via these platforms.

Go For Federal Loans First (Before Private Loans)

If you have failed to win a scholarship or a grant, there is no other way than going for a student loan. There are two ways to get a student loan, Federal Loans and Private Loans. However, it’s important that you go for federal loans first before you try your luck with private loans. Federal loans come with many benefits. Most notably, they offer fixed interest rates meaning you can plan your budget without any worries of restricting it every now and then. This is different when it comes to private loans which offer variable rates that may jump up when you least expect it. In addition, federal loans may be subsidized (mostly depending on your GPA0 hence you end up paying less than what you would if you go for private loans. Lastly, federal loans have a deferment period meaning when you are unemployed you will not make repayments, with private loans, as soon as you graduate you have to start making repayments whether you are employed or not.