Facts you need to know before getting a student loan
Students mostly from middle and lower economic class always need financial aid to realize their dream of a college degree or diploma.
Most often he hard reality is that bursaries, grants and scholarships are always given in competitive terms locking out most potential candidates.
Although other financial option like personal saving is open, a student loan offer help and peace of mind for a candidate to enroll in college without shifting the life style especially when married or with a family.
When the student is already repaying a loan, benefiting from one or in a process to acquire the money, the following facts will greatly aid in giving you the right decision to the right direction;
a) Your credit worthiness; unlike in scholarship or grant, loans areas not a charity but profiteering ventures. Though the adverts will entice you with ‘financing your education’ slogan, the bank or the organization will have to check your credit worthiness, which is the ability to repay the loan.
On the forms filled before hand you will need to give your assets, liabilities, earning, any business ventures, and source of income and general expenditures. Your credit repayment history in other financial institutions will also be verified; additionally some institutions will go further to testing ones health.
A would be beneficiary need to know how strong his credit worthiness to increase the chance of getting a loan.
b) The financial institution; This aspect though overlooked re-assures the student the safety of his education with minimal, if any, chances of deferring and complete termination.
The financial institution through stock exchange and media coverage has to be checked for market strength against other offers and any history of failure in loan sharking like ‘Ponzi schemes’
Education is so essential for one to gamble with conmen and loan sharks, a student need to be courteous of un trusted sources especially online.
c) Knowledge of loan details; A student need to be keen on the interest rate offered, the actual amount awarded and whether the money will cover tuition or upkeep and to be deposited either in college account or directly in your account.
Will the loan cover all your academic years? What about in case of deffering your studies? How will the guarantors be affected incase you are unable to pay? Will it cover the cost of your internship?
This question will reduce anxiety during study and make the student detailed on course of study.
d) Future earning potential; This directly affect the rate you will repay the loan to avoid interest accumulation. The easiest ways is by checking the current professional in your job category and add to your investments.
Most often if employed, especially by the government you will have a standing order to repay the loan. But it’s better to pay personally or add on standing order when your earning is higher.
e) Marital status; Although married couple are more credit worthy with double earning power in salary, they can also mean more loan to pay especially when both partners are beneficiaries.
If your spouse acquires the loan before marriage, would you be willing to shoulder the repayment? How will your spouse react to reduced spending on loan repayment?
This queries need to be addressed by married couples to help in harmony for a student.
f) Testimonial; the road of financing education by loan is a well beaten path and students need to consult beneficiaries, lecturer, tutors and financial institution personnel for insight.
This avoids falling in loop holes, cut cost in getting the best loan’s and how to repay.