What is a Student Loan?

Excluding the tuition fee, college can be costly, and students make mistakes by loaning more than what they can afford. They would be under the false impression that a high-paying job will await them once they graduate and they’ll be able to pay back their student loan. We’ve been all in that kind of situation, and this kind of mindset needs to stop.

Banks and credit card companies rush to loan college students money, and many of these young people are inexperienced in handling their finances; that’s when things start to go downhill. Many lenders see college students as being future income earners, which is true. There is no denying that. By getting these students into debt early, lending companies ensure they will earn residual income for many years.

If you see yourself in this situation, some companies that fix your credit; there is a lot on the internet.

How will you repay a student loan?

If you have a student loan, you have a 6-month non-repayment period after graduation. This means you don’t have to pay within the 6-month duration, and you’re not charged interest. You don’t have to wait for 6 months to start repaying your student loan. You can always begin repaying whenever you want.

Your 6-month non-repayment period starts when:

1. You finish your final school term.

2. Transfer from full-time to part-time studies.

3. When you leave school

4. When you take some time off school.

After your non-repayment period, you must log in to National Student Loan Service Centre for your repayment schedule. This is where you organize your student loans.

There are various types of student loans you can apply for.

There are Government Student loans and Bank loans for students. And within each loan lies the different loan options. It will only depend on what kind of borrower you are.

Government Student Loan

The government can grant you a loan after assessing if you are eligible to apply. Upon applying, you don’t get to choose how much loan you can get; they’ll be the ones to determine how much you can get.

They have different factors to consider when assessing how much loan to guarantee you. For example, your family income, whether you are part-time or full-time.

Government Student loans do not accumulate interest while you are in school. The payment will start after the gracing period upon your graduation.

If you do not qualify for Government SL or have yet to receive enough, there are still other private institutions and student loan providers.

1. Student Line Of Credit– just like your regular line of credit, you are given a maximum limit, and the interest will depend on how much you withdraw from that limit.

2. Bank Student Loan– usually paid back monthly over a period. You must minimize how much you borrow to ensure you’re not paying more than you can handle.

Types of Private Student Loans

1. Undergraduate Loans

– It requires a co-signer. A co-signer must be willing to take responsibility if you default. Private lenders usually require it since students have yet to build credit. It also has a higher interest rate than Graduate Loans and typically has a lower loan amount limit.

2. Graduate Loan

– for grad school, medical school, etc. Less likely to require a co-signer and have a higher loan amount limit.

What is the best choice for you?

Well, the answer will depend on you. Depending on your financial status, preference, and risk tolerance. 

A general rule of thumb: Federal Student Loan should be the first place to check.

If you still need clarification on what you will choose. Let’s break down the differences.

Federal SL is suitable for every kind of borrower. It has unique repayment options and a more extended deferment period. They also have no minimum credit score, which makes them beginner-friendly. That said, borrowers should max out their Federal SL before taking any private loan. It is an excellent chance to build a good credit score.

Private SL, on the other hand, is best for borrowers who don’t qualify for FSL because of citizenship status or borrowers who borrow money above the standard of FSL. It is a good choice for individuals who have an excellent credit scores.

Borrowing money at such a young age should be avoided at any cause. Parents should provide for their children and guide them financially. Talks about financial management should always be on the table. In that way, young people will learn about financial management instead of borrowing money.

However, there are instances we cannot control and force us to take out a student loan. And that’s fine. Though you need to study financial management for you to be able to survive on your credit and finances.

There are affordable credit repair services that can help you fix your credit when things get out of hand.


There is nothing wrong with loaning money, especially when you support yourself. However, this might be a band-aid solution to your problem. Before borrowing money, make sure to exhaust your possible solutions first. Get a part-time job if your time permits, or apply for scholarships available in your school.

There are many ways to avoid getting into debt. You can also use a debit instead of a credit card on your purchases. Simple things like that help you avoid debt, especially if you still need a stable source of income.

Who can help my credit?” Us. We at Credit Repair Now can help you with your credit problems.

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