A Personal finance blog to get rich
If you’re paying off student loans, you might know the headaches involved with seeing your balances stay at almost the same level, despite paying hundreds of dollars each month. This is a common phenomenon experienced by borrowers across the board, regardless of the loan type.
Most loans are front-loaded, which means you will be paying off interest before making a dent in the principal balance.
Student loans are one of the most difficult loans to pay off. When people take out student loans for college, they usually have no idea how much they’re going to have to pay back when they’re finished. The money adds up fast and often ends up being far more than they can afford after school is finished. If you have found yourself drowning in unanticipated student loan debt, you need to know some tips for paying back your student loans without going broke.
If the total amount of your loan is the issue and not your monthly payment, paying back a larger amount every month is the best way for you to pay back your loans. Interest on a loan is what ends up costing people. When you pay your mortgage, a car payment, or anything else you have financed, the majority of your payment goes to the financing and a small portion goes to the principal.
Whenever you pay more than your minimum monthly payment, all of the extra money goes toward the principal. For example. If your payments are $400 per month, but you decide to pay $700 per month, that is $300 each month going toward the principal, drastically cutting down time and money off of your loan. You can take months or even years off of a loan by making extra payments.
Unprivileged high school students thinking of getting a university degree or people who completed a certain degree and are now contemplating to pursue a different profession usually find it difficult to finance their higher education.
This is due to the fact that higher education is becoming increasingly expensive, and the unfortunate thing is that quite a number of individuals are not in a position to afford it.
The dream of every student who is haunted by a student loan is to pay it off as fast as possible. How exactly can you achieve that? How to Pay off a Student Loan as Fast as Possible?
What do 25-, 35-, and 45-year-olds have in common? They all are still paying off their student loans. Apparently, you can never be too old to be in debt to your alma mater in terms of your precious knowledge and financial pit.
Whether you are about to graduate, just graduated, or have been making student loan payments for a while now, it’s important to be aware of the many options you have to streamline the way you make your monthly payments. These days there are so many options other than the standard ten-year repayment plan.
More people than ever are refinancing or consolidating their loans to both simplify their payments and save money. And the increased availability of income-based repayment plan options means that nearly everyone with student loans can adjust their monthly payment amounts to correlate with their income and make their payments more affordable.
Each year, 20 million students attend college in the United States, and approximately sixty percent of those students borrow money to cover the expenses of tuition, textbooks and fees. With college being the first major financial decision many young adults make, you’d be surprised to find out how many are genuinely confused about the application process. Many do not consider that the amount borrowed and the interest rate of the loan could impact your finances for the rest of your adult life, long after college is over.
For those who are confused, the basics are this: the average student takes out nearly $30,000 in student loans over four years. With an interest rate of 9% annually, the student can expect to pay nearly $15,700 in interest over ten years, if it took them ten years to pay off the loan. That is a lot of money in interest, over half of the original amount borrowed. The monthly payment on this amount would be $380, which is a lot for someone right out of school and making entry-level salary.
According to a new report from TransUnion, the burden of student loans on young people, ages 20 through 29, is much heavier than it was for that age group a decade ago. On average, a twenty-something today has about $25,000 in student loan debt.
That is up about $10,000 from 2005. There are several reasons for that according to some economists and financial experts but it is a point of common observation that the consistent uprising in student loans is mainly due to the poor management of debt by the individuals and stringent monetary policies adopted by the state.
I come from a country where education is highly subsidized. True there is no social security which is a big disadvantage and doesn’t outweigh subsidized education. But, I graduated with almost $0 in tuition cost. My only expense was the living cost while I was in a dorm. Even the dorm had a very nominal rental fee. After living in the USA for the last 10 years and after watching 100’s of close friends graduating from college with an enormous student loan, I wonder if the new graduates are really happy with their first job or are they worried to repay their debt.
Let’s start with some statistics. Almost 40 million Americans have student loan debt. The aggregate amount of loans is $1.2 Trillion, 84% increase from 2008. Now this enormous debt started putting pressure on the US economy. While it’s arguable whether govt. should come for helping the students and extend tax breaks, loan forgiveness or other perks that they generally extend for businesses, let’s try to find a solution for your debt problem when you’ve just graduated.
Education is very expensive and even more when you target schooling at the best institutions. It is at this point that education loans have become very helpful in enabling you to advance and reach career objectives.
However, the moment you are through with your education, you must get the right method of repaying the education loan. This has become burdensome to many. Here are the five ways to tackle the student loan burdens.
Readers, this is the third guest post from Bill for you. Now I am even considering offering him staff writer position. This post talks about a very important aspect of our lives, mortgage. He talks about the possible impact an outstanding student loan can cause on your ability to apply for a mortgage. Enjoy the post!
Have you been frustrated by your mortgage company when applying for a mortgage loan? If so, the reason might be you’ve not cleared your student loan or probably other types of loans.
