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How a Student Loan Can Really Disrupt Your Future

by Olufisayo
How a Student Loan Can Really Disrupt Your Future

If you are getting ready to dive into the world of higher education, this is for you. You’ve seen the tuition. It’s expensive. Before you turn to a loan, check what other avenues you can take.  Many school have grants and scholarships. The school should be able to help you find other ways that you could qualify for. If you’ve exhausted all of those, a student loan may be your only option.

There are a few things that you should know about student loans before you take one out.

First, once you accept a student loan, there is no getting out of it. It doesn’t matter if you lost your job or experienced a huge hardship, that debt is not forgiven. Many other debts that you get will have a way to get out of them. If you buy a car you can sell it, or give it back to the lender. That is terrible for your credit, but can happen.

How a Student Loan Can Really Disrupt Your Future

If you can’t pay your mortgage, the same thing happens. You can sell it to pay the debt off or let them foreclose. Also, terrible for your credit. If you file bankruptcy, those things can be included on the bankruptcy and then they are done. Not student loans. You will pay them off. Even if it takes 20 years. Student loans are one of the few things that you can’t get rid of even if you can’t pay them. The lender can take you to court to make you pay.

       

A student loan can crush your dream of home ownership. There are two ways that it can hurt you. The first is if you have ever missed or been late on payments. That one should be an obvious reason. The second is the actual debt itself.

When you are applying for a mortgage, the lender will want to look into any debt that you have. It doesn’t matter if you are wanting a USDA home loan, a VA home loan, or a conventional loan, lenders will want to know about the debt you have. Your student loan is figured into your debt to income ratio. If that ratio is too high, you will be denied the loan.

If you want to start a business, that pesky student loan can affect getting a loan, even a business loan. If you are wondering how your student loan could affect a business loan, it’s simple. Debt. When you are first starting a business the lender will look at your credit. If you missed payments that will hurt your chances. If your debt to income ratio is too high, even if you haven’t missed a student loan payment, it can cause a loan rejection.

If you have no options to pay for school, a student loan is still a good idea. It may feel a bit scary to take on a large amount of debt, but the payoff should be worth it. Before agreeing to a loan, be sure that you know exactly what career you want. Be sure that you are dedicated to obtaining that degree because you will start repaying the debt within six months of finishing school, whether or not you got the degree. If you are set on getting your degree, a student loan should easily pay for itself many times over.

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