In an ideal world, education is accessible to all. But since we live in less than ideal times, the truth of the matter is education has become quite exclusive. If you were not born with the capability of financing your college years without sweat, things could go two ways. You’ll either have to settle with an affordable educational institution that may not be your best option or halt your education altogether.
You might also doggedly pursue education and become a romanticized working student, but that may come with the risk of suffering burnout as soon as you receive a college diploma. Then, that defeats the whole purpose of your sacrifices.
So, yes, the entire education scenario looks bleak if you’re not well-off financially. However, there’s a silver lining you could explore: a student loan.
It’s understandable if you feel a bit hesitant about borrowing money to finance your schooling. So, to help you make an informed decision, here are the pros of applying for a student loan.
1. Focus on what matters
Quality education is rarely cheap these days. If you want to have a more competitive resume once you join the labor force, you’ll have to invest in expensive education from a prestigious institution.
Unfortunately, that’s not something easily accessible to most people, unless you’re rich or upper-middle-class or exceptionally gifted academic-wise. If those prerequisites don’t apply to you, you might have to work while studying so you can pay your way through college.
While that will gain you a lot of admirers because of your sheer determination, you might end up failing to focus on what truly matters – your entire college experience. Remember that those four or five years will probably be your last hurrah before joining the adult world that gets all too real all too quickly.
2. Improve your credit rating
Your credit score is important when applying for major loans, such as a mortgage. Purchasing residential property will likely happen after a decade or two of your participation in the labor force. However, it’s best to buff up your credit score early. If you did, by the time you applied for a house loan, you would have a better shot at impressing creditors.
With a student loan, you’ll have an early lead in the race for credit rating supremacy. That is if you prove to be a responsible payor. After graduation, pursue a lucrative full-time job and create side hustles, too, to make that goal doable.
3. No credit score required
While in the future your credit rating will benefit from a religiously paid student loan, now you won’t be required to show an impressive credit score upon student loan application.
This leeway, offered by creditors, is due to the assumption that since you’re a student, you probably haven’t had many opportunities to write your John Hancock on credit agreements. That means it will be much easier for you to apply for a student loan than, say, a credit card.
4. Flexible payment terms
You may choose to pay a student loan immediately after a semester. And if in the following semester you have the money for tuition, then you won’t have to apply for a new one.
However, some student loans are offered for borrowers who agree to pay after graduation. Whichever option you choose, make sure it’s the most compatible with your financial circumstances.
5. Financial consciousness at an early age
While we champion making the most of your college years, we don’t advocate financial illiteracy. That means that even when you’re having fun in both academic and extracurricular activities, you must stay conscious of your finances. At this time, it’s best to entertain starting your savings. So, every chance you get to put extra money in your bank account, do so.
With a student loan that has to be paid on the horizon, you need to be wiser with every cent you get and spend. In return, you get to realize the value of money early on. By the time you have a job that pays, you’ll be better equipped at handling your finances.
6. Financial assistance during difficult times
The pandemic has caught us all off guard. Most families experienced financial difficulties. That directly affected how parents can fund their children’s education. If you relate to this scenario, it’s high time you explore student loans. That’s a viable option to continue your college education even amid your family’s dire financial situation.
A student loan, just like a regular loan, is given by private financial institutions to an eligible applicant they deem to be a responsible borrower. These loans are offered at an agreed interest rate. Unlike a mortgage, which you start paying upon issuance, you may opt to pay your student loan after graduating college. By then, it is assumed you’ll find work that will allow you to settle what you owe.
With this loan agreement, you can focus on your studies now. All you have to worry about are the papers you have to deliver and exams you have to pass. And since you’re not financially stressed, you’ll have time to party, too. So, dear student, enjoy your salad days.