For most young people, their ultimate dream is to go through higher education. This allows them to land a decent career that will guarantee them financial independence. Unfortunately not all are able to achieve this because of financial constraints and this is where students’ loans come in. Most governments and private financial institutions have schemes through which they finance the students’ higher education. They then demand payment after they have graduated and landed jobs. If the Government advances these loans, then they attract very low interest rates.
Conditions for Student Loans
Before qualifying for a students’ loan, one will need to have proof that they have admitted into a college. They also require documents such as a certified admission letter and fees structure to support the amount being sought. Other requirements include personal identification documents, proof of physical address, parents’ income statement. This is to prove that you really need the money and prove your guarantors. The number of guarantors varies from one institution to another. They should be people who can bear the burden on your behalf should you default on paying the loan.
In some countries, students from needy backgrounds and single parent families are usually given a grant over and above the loan. This is especially so in developing countries where education levels are still low and the respective governments aim at keeping as many students as possible in colleges until they graduate.
Pros and Cons of Student Loans
There are still no clear and effective ways of recovering student loans and most of them usually go unpaid. Some students will for example graduate and move to work and live in a different country. This means they are untraceable. If they do not decide to pay back the loan at will, it definitely becomes a bad debt. Most students do not give correct information about their parents’ status and physical address, and even if they do, physical address is bound to change. This makes it very difficult for the lenders to trace them in attempts to recover the borrowed money.
Being young and ambitious, most students are prone to misusing the loaned money by excessive partying and clubbing, drinking, and some even go to the extent of getting into drug abuse. Because of such awful spending habits, they are also a target to illegal money lenders who promise quick money but end up blackmailing them. Students are therefore advised to be good money managers and make do with the little they have, other than ruining their lives out of greed.
Student Loans Repayment
After completing their studies, students have different options that they can adopt to repay their loans. The first one is making bulk payments which will save them from accrued interest. However, very few can afford to do this since it requires getting the whole amount at once. The second option is paying the interest during the grace period. Following which, then start paying the loan amount later again to prevent the interest from accumulating. The third and most practical option is attaching your monthly remittance to your income. This will ensure you do not give it a second thought and with time, you will be comfortable with deduction in your income.
For more information of student loans, please visit the Best Licensed Moneylender Singapore, where our experienced staff can provide you with sound advice and information. Alternatively, you may contact us by dropping us a message.