Student Loan – Best Way To Study Without Borrowing

When we speak of loans, the first thing that comes to our minds is money. This is because the term loan is commonly used to speak about any financial obligation arising out of borrowing. These obligations are created to satisfy some need or to pay for some expense or to fulfill some demand. The most common types of loans are personal loans (e.g., credit cards, personal loans, etc. ), car loans, business loans, home loans, and student loans. These are the most popularly taken loans that almost everyone is familiar with.

Loans have several purposes and for different reasons. A personal loan may be given to satisfy a need like buying a new or used car, repairing an existing house, paying off outstanding debts, or financing higher education expenses. A student loan may be used to make payment on tuition fees, buy books and other school related expenses, or even to fund your child’s college fund.

While many students initially opt for a lower interest rate and longer repayment period to avail lower monthly payments, in many cases this proves to be a mistake. It is observed that student loans often create more problems and cost in the long run than they solve. These loans offer no reduction in principal amount even when the interest rates are increased by one percent, thereby increasing the monthly payment to an unimaginable extent. Hence these loans are not a suitable option for long-term financial solutions.

Another problem with these loans is that they create a double penalty i.e., the interest rate applicable on the principal also gets increased by the finance company after the borrower makes late payments of the same. Usually, charge extra interest on the principal borrowed and also charge extra interest on the additional amount that is added to the principal loan amount. Though the borrower is legally liable for both the amounts, yet he has to pay only the interest amount that was charged on the principal loan.

Such financial problems can also be overcome by opting for debt consolidation loans which combine all debts into a single loan, leaving the borrower with one lender instead of two. In other words, a single lender will provide you with a loan at a cheaper interest rate, keep your repayments at one-step-low and thus help you manage your monthly finances. Debt consolidation also helps in managing your credit score. Debt consolidation loans may include both secured and unsecured loans, however, it depends upon the type of loan that you apply for. A secured loan is that in which your home or any other valuable asset serves as collateral to the lender. Unsecured loan, on the other hand, does not require collateral to serve as security and hence it comes without any restriction.

Since student loan availing is now very easy, you don’t have to wait for a long time to get your hands on any kind of loan. The application process of these loans is fast in comparison to all the other traditional loans and you are granted approval within minutes. Thus, the only thing that remains for you to do is choose a reputed lender who is ready to lend you money at a reasonable interest rate and interest rates. After doing so, you will surely be able to fulfill your dreams of getting a good education without borrowing money from anyone.g

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