Being a student call be tough. You dream of going off into the big wide world once you have completed college and doing something fantastic with your life. You dream of changing the world.
And while many students will go on to change the world post college, no matter what you achieve in life there will be one thing every student has to deal with and wishes they didn’t have to – repaying their student loan.
When you’re in college your student loan might seem like a life send, allowing you to study your favorite subject and have fun with your friends. However, once your time at college is over it will seem less like something to be thankful for and more something to regret.
How can you go about repaying your student loan? What can you use to pay off your student loan? You might be asking yourself can I pay my student loan with a credit card? Can I pay it off in one lump sum or does it have to be over a period of time? This piece will explain exactly what you have to do.
What Is A Student Loan?
Firstly, let’s explain exactly what a student loan is. A student loan is a loan either by the US government or a private lender that allows you to attend college in the United States. The loan is typically between $5,500 and $12,500 depending on your dependency status and what year of school you are in. The loan is given out each year as a means of paying for tuition fees.
However due to the United States’ system of college fees outstripping anywhere else in the world in terms of cost versus income, students more often than now have to take out additional loans from private lenders alongside their government loan in order to afford college.
This can of course cause problems later. This is because the longer the loan is unpaid for the greater inflation will cause it rise. This is especially true if you take out a loan from a private lender as they may have stipulated a certain APR percentage.
APR stands for Annual Percentage Rate and means that the lender can charge a certain interest percent on top of your loan depending how long it take you to pay it back.
This is why finding a suitable means of repaying your student loan is vitally important as without it you can find yourself in a lot of debt.
How To Pay Off Your Loan 1) Can You Use A Credit Card?
You might be wondering whether using a credit card is not the best route to paying off your student loan – after all you might be able to pay a big chunk off it all at once and not have to worry about it for a while, right?
That’s where you’d be wrong. Using a credit card to pay off your student loan is a bad idea for two major reasons. Firstly, most American universities and the US government won’t accept repayment directly from a credit card because they know that it might not be sustainable for the student and because it can cause an undue amount of stress.
This means that it isn’t possible in most cases to pay off your student loan via a credit card.
There are ways around it of course such as using a third party provider linked to your credit card to pay off your loan or alternatively transferring your student loan balance to your credit card. However, this can equally risky if your credit card has an APR percentage.
It would be bad enough if you had to pay off the money you had borrowed on your credit card to pay off your student loan only to find that you were being charged an extra rate of interest.
This is why using your credit card to pay off your student loan is a bad idea because ultimately it will only hurt you in the long term. You will end up paying off not just the student loan but also the loan that you’ve taken via your credit card to pay off the first loan!
This spiral of debt can often be how people end up in difficult situations and need to earn more and more money to be able to pay off the loans they have taken out.
How To Pay Off Your Loan 2) The Better Method
The better way to pay off your student loan is of course to make it manageable. Whilst it is easy for some to say you just need to get a job, due to the amount of debt students get in the American university system, simply getting a job won’t help. Most students do in fact work whilst studying so that they can help pay off their loan and live.
Making your student loan manageable will involve speaking to your university or private loan provider and discussing with them how best you can repay your loan in a way that works for you and the university. This usually means paying your loan in instalments over a period of several months and ensuring you pay on time.
Whilst this can be difficult it is better than the alternative. One of the major sources of depression and financial worry for young adults in the United States is their student loan debt. This is because it can be seen as harm their prospects for a future.
Rather than making the situation worse by using a credit it, it is infinitely better to pay it off with money you actually have.
Is Getting A Student Loan Worth It?
You might wonder whether getting a student loan in the first place is worth it. Is college worth it if you are just going to get into a massive amount of the debt?
Whilst getting a student loan can cause headache it is worth it for the experience of college. College can help open your mind not just to work opportunities but also allow you to explore your imagination in a way you didn’t previously think was possible.
College is very much worth it and because your student loan helps you get there it too is worth it, in the end.