Thu 21 Feb 2008
An education loan is a form of financial aid that must be repaid, with interest. Student loans also provide a variety of deferment options and extended repayment terms.
Student and graduate loans are becoming more popular as student debt continues to rise and students seek alternative ways of dealing with it. The good news is that student or graduate loans are generally available without the need to show steady income or offer security. This is extremely helpful, as most students will not have either of these.
Student and graduate loans also come at relatively good interest rates, particularly having regard to the fact that they are completely unsecured. The thing to be wary of is that such loans may lock the student into a long-term relationship with the lender that may not be the most advantageous one.
Graduate loans on the other hand, are far more expensive than student loans. These loans are generally offered on graduation, when student loans are no longer available, to cover the costs of transition from student life to working life. This may include finding a new place to live, buying work clothes etc.
Graduate loans will also be used to pay off student overdrafts, which are offered to all students as standard features of their bank accounts. The point to remember is that while graduate loans are relatively cheap when compared to personal loans, they are far more expensive than student loans.
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If you have a job lined up, you may be able to borrow money from your new employer at a far better rate. This is one alternative to graduate loans. Another alternative is career development loans, which are available to those studying for certain professional qualifications such as medicine or law. Many high street lenders offer these.
It can be very easy to lose control of debt while studying. The credit is very easy to obtain and repayments so far into the future that they don’t seem real. However, high student debt can seriously hamper attempts to buy a home once you enter the workforce, or save for a pension. The trends show that while student debt continues to increase, graduates are faring better, relying less on borrowing and more on salaries, to meet their needs.
February 21st, 2008 at 10:42 am
I found your site on google blog search and read a few of your other posts. Keep up the good work. Just added your RSS feed to my feed reader. Look forward to reading more from you.
– Randy Nichols.
February 22nd, 2008 at 6:32 am
Another great way of making sure you pay off debt by not spending as much is by using a prepaid reloadable debit card, like the UPside Visa card. Unlike a debit card from your bank (which many allow overdrafts, getting you into even more debt), you are only able to spend what you put on the card. You are able to fund the card periodically or automatically with allowance schedules, from family, friends and employers. And with multiple plans to choose from, you can find a card that fits you and/or your family’s lifestyle, as you can get the card for yourself or one for family members that are either already in need of debt-help or you would like to teach healthy financial living to, like your kids (as young as 13 years of age).
February 22nd, 2008 at 12:03 pm
Quote: “The good news is that student or graduate loans are generally available without the need to show steady income or offer security.”
This is so true. I remember when I was at San Jose State, American Express set up a booth in the campus, and offered Amex cards to any student who showed his/her student ID and had a bank account. No questions asked.
(Well, that was also when I got hooked on to credit cards.)