Student Loan – A Boon or A Curse?


A student loan is a money you borrow from any financial organization to attend college or career school. You have to return the amount with interest to the organization in a definite interval of time. Every year many students take admission in various educational institutions to continue their further studies. But some students face trouble to continue their further studies because of lack of money. In this case many financial organizations help students with loan. Many of you may take it lightly and see this as an opportunity to fulfill your dreams. But some of you may find it an impediment to achieve your goal. Many people will say student loans are “Evil” and suggest you to skip college. Most of you also consider your student loan as debt. But when managed properly, it can turn into excellent financial decision for you. In this post you will get to know more about student loan.

A question may arise now in your mind that how student loan is beneficial for us. These are some advantages of student loan given below:

1. Lower interest rates: The interest rates are lesser on student loans in compared to personal loans. Therefore it becomes an easy option for students to take help to complete their studies.

2. Moratorium holiday-pay after completion of course: One of the significant advantages of student loan is that it allows the student not to make any payment to the lender until the completion of the course. The EMIs of student loans start after moratorium period which includes course duration plus 6-12 months.

3. It covers a wide range of expenses: Generally student loans cover almost every necessary expense that a student might need to complete their studies including tuition fees, travel, house rent, university fees, food expenses, living expenses etc.

4. It prevents liquidation of your valuable assets: Many parents liquidate their valuable assets to bear the educational expense or their children. But sometimes it disturbs their long-term financial goals. When you take student loan, banks grants your loan against your liquid assets like FDs, insurance and government bonds etc. Therefore, the loan doesn’t cause any trouble in your long-term financial goals.

Along with financial organizations, government also help student to take loan and complete their education. Sometimes government launches some scheme to benefit the students. Taking these kind of government educational loan can really help you a lot as they set sometimes very low interest rate and even sometimes government forgive your remaining debt after many years of payments. So always search for this kind of scheme before you take the loan.

After taking the loan, many people seem fall into debt because they unable to pay off their loan. As time goes on, they get more and more deeply in debt and this also effects on the other financial goals of their lives. There are just some of the measures that you should adopt while amortizing the debt so that it does not become a hindrance in the progress of your life.

1. Know how much debt you have: The amount you have taken for your student loan is your total debt. You should know how much debt you have, whom you have taken the loan, monthly payment, and interest rate. After knowing these you should take the loan. If you make a wrong decision in the first step, you will face trouble at the time of paying off your loan.

2. Sign up for automatic debit: If you sign up for automatic debit, your student loan servicer will automatically deduct your monthly payment from your bank account each month. It not only keeps track of your payment but also helps you to make early payment every month before you run out of money.

3. Pay more than your minimum payment: Always try to pay more than your minimum payment every month. It will save your money by reducing the interest and will free you from the debt quickly.

4. Search for forgiveness programs: As I have already mentioned that there are some programs which forgive your student loan debt after many years of payment. So search for this kind of program which can relief you from your student loan debt.

Student loans are really very helpful for students when used properly as it is designed specifically for higher education. Just check once the terms and conditions before you take the loan. Otherwise you will probably fall into the debt trap. Once you fall into the trap, it becomes difficult to get rid of it, which can also hinder your progress in life. That’s why you should be a little careful while taking the loan and make good use of it.

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2 thoughts on “Student Loan – A Boon or A Curse?

  1. Sekret-Natury

    Insightful piece

  2. Zobacz więcej

    Outstanding feature

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