The financial aspects of a good education are unavoidable, and while some students may be financially capable, others will have to depend on assistance. Some universities offer scholarships as a means of lessening this burden, but, not all students can qualify for one, and student loans are an alternative for financing one’s education.
A student loan is a kind of financial investment to assist students with school-related needs. These needs include tuition, books, living expenses and school supplies.
Types Of Student Loans
Typically, student loans have a low-interest rate, and there are two types of rates available. Variable interest and fixed interest. A variable interest is usually lower than a fixed rate; however, they can fluctuate because they depend on the rates in the market. So if the rates are up, the variable interest will increase and vice versa.
Fixed interest rates, on the other hand, remain constant throughout the life of the loan except you consolidate. Lower fixed interest rates are usually higher than the variable rates as you are trading flexibility for stability. Knowing the kind of rates to choose can be a bit of a gamble.
If you want to see the interest you are paying on loan; the fixed rate is for you. Choosing a variable rate means you may pay a higher or lower rate on loan over time, depending on the market forces.
What To Do When Applying For A Student Loan
When applying for a student loan, you should plan first. Be sure of the number of years the course you are taking requires and put it into consideration. You should work very hard to finish school at the appropriate time. This meaning doing your everything in your power to avoid an extra year. We most certainly are aware of the implications of an extra year are. Extra tuition fees
Also, think of ways to keep your expenses low so that you can make the most out of the loan. For example, you can share a room with someone or keep your books in good condition so you can resell them at the end of the semester.
Make an estimate of your first salary per annum when you start working. More importantly, try not to borrow more than it. Doing this will enable you to pay back faster and at your comfort. All you really have to do is manage your expenses well.
Most of the time, students are skeptical about taking student loans because. They are worry because they feel they may not be able to pay back.
However, loan companies in Nigeria have the option of paying in instalments while in school, or immediately after graduation. Some banks that grant student loans in Nigeria include: Access Bank, KeyStone Bank, Heritage Bank, Ecobank and LAPO Microfinance Bank.
To conclude, when you are taking student loans, be sure to understand the loan terms and try to get as much information before deciding. You should also know the features of the loan and the type of rate interest you want.
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