Things you should know before taking student loans


After high school, you are always expected to join a college or a university and pursue a career of your choice. However, before finally settling in, you will have to take care of the finances.

Getting an acceptance letter doesn’t guarantee you a direct entry to the university but that, together with the tuition fees. Now this is where most of us usually have a difficult time as it’s never that easy to come by such a hefty amount in a short time.

This is why most people would always use student loans to support their studies. However, before applying for them, here are a few things you will need to know about them.

  • Private or federal loan

Well, most loans usually don’t have the same terms and conditions. However for the student loans, they will always come in two types.

A federal loan which is always funded or provided by your government or a private loan which is often provided by banks or other individual lenders. The federal loans will usually come with some incentives including interest rates among other things.

This is why you are always encouraged to do your own research and maybe you will be able to find some private loans having lower rates when it comes to the interest.

But it is always seen to be a good idea if you check the federal loan options first before trying the private one.

  • Period for loan repayment

Of course when someone lends you some cash, you will have to pay it back after some time right?

This is the same when it comes to student loans too. If you agree to pay back your loan a bit fast, you will most likely pay more per month but with a reduced interest rate.

The reverse is true when you decide to pay back in small installments. Taking much time will always result to higher interest rates.

  • Knowing the grace period

The amount of time one is usually allowed to take before making their first payment is called the grace period. You should keep in mind that not all loans usually have the same time before you could start paying back.

This is why you need to find out the due date given for you to make the first payment. Having a grace period is always advantageous since it gives you time to come up with a plan in which you can use to get the money and pay back your loan.

Well, a longer grace period might be beneficial but it is still possible if you can be able to start making your payments before the grace period is over. This might help in reducing the interests from accumulating.

  • Forbearance and deferment

As said before, loans are usually different and will often come with different terms. However, it is a common behavior for one to always want to be given some break or a little bit time off the payments.

This is where forbearance and deferment always come to the rescue. This really can help as they give you the ability to have your loans reduced or to even stop your payments. However, the interests will keep on accumulating.

Deferment on the other hand can allow you to stop making the loan payments on both the interest and the principal for many specific reasons. Anyway, you need to find out if you can find one of these options or even if you can be able to get both.

Also, you need to find out what you must have or do for you to be qualified to getting these options. Click here to learn about forbearance and deferment.

  • Know why you are taking the loan

Well, it usually isn’t that easy to find the answer to this question how ever stupid it sounds. You should be able to have a plan on how you will manage to pay the debt in future.

It is important that before you sign anything to take the loan, you should be able to calculate and know how long it might take you to repay back your loan. This will help you avoid some problems in future.


Before doing something, of course you need to understand a lot of things concerning the action you are about to take.

Even if you don’t know anything on loans, you can go ahead and check on student loan reviews and see what you can find. From here, you might even be able to know what loans are suitable for you.

Marcus Haney

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