Debt and Student Loans

Debt from student loans have been going up across the board over the past number of years. Student loan debt is neck and neck with credit card debt as something that is going to be a ticking time bomb waiting to go off. In fact, a sizable percentage of people in debt get that way with misunderstanding certain concepts about loans and certain conditions. Student loans is far from the only thing.

Falling into the Student Loan Debt Traps

One should know that the loans do not get you off of the front end, with the actual payment that you see right before your very eyes. They merely latch right onto the back end, with the interest rates. If you are paying off your student loan for five years, there is a great deal of interest that could be cropping up. It is something that students should be mindful of, especially those who pay the minimum payment.

The minimum payment is something that is another debt trap. You can get by soon enough but it will extend your debt further and further. If you can pay manage to pay more than the minimum, then you should pay more than the minimum. If you somehow manage to get into a position where you can pay all of your debts, then you should most certainly pay all debts.

Do not take it to heart too much that you have six months before you must start paying your student loans. That is six months where additional interest can be collected and they have a six month head start where interest can be collected. You do not have to wait six months, you can start the moment that you are going to graduate.

You may also receive checks at times for "excessive payments." That is not excessive payments for the loan that is not counted, but rather excessive payments that the loan company have given to your school. Many people mistakenly think that those checks are for them to spend, which cannot be further from the truth. It would be advisable to put any money that you receive that is "excessive payments". If you have a money market, place it in their, so it can collect interest. 

Of course the most important thing to remember about student loans is that they should only be taken out. Scholarships and grants are the best way to go but it might be a road that is tougher. If a loan is the only option for your studies, then you may want to severely consider your options.