When you’re getting ready to set off on your own to college, you’ll feel invincible. So, what if the average student debt on graduation was $29,000 in 2018? You won’t be one of the ones who can’t afford to repay your loans. Right?

Student Loans And How They Can Negatively Affect You In The Future

Most students feel this way before they set out. They might even think that they have no choice. For some students, there’s no option but to borrow money.

What many students don’t realize is the impact of bad decisions on their future. They can take a loan that defers capital repayments until six months after graduation, for example. It’s one of the easiest options if you’re a cash-strapped student.

Unfortunately, though, it’s also the one that’ll cost you the most money. The loan provider will continue to add interest to the capital amount. The first interest calculation is on the original amount. You pay the interest, but the capital amount never reduces.

When the loan provider calls you to repay the loan, the installments are often higher than you realize.

Defaulting on payments will negatively impact your credit rating, too. An unfavorable FICO score puts you out of the running for top jobs and other opportunities—the wrong student loan agreement could impact the rest of your life.

Different Types Of Student Loans And Knowing What Is The Best For You

Student loans in this country fall under one of two basic categories – government and private loans.

It’s best to apply for government student loans first because these offer the best interest rates. The government is less strict when it comes to collateral, as well. State governments provide loan forgiveness programs for students who can’t repay their debts, too.

The government offers subsidized loans and unsubsidized loans. To qualify for the former, it is more complicated. These loans are primarily for those who can demonstrate that they’re in need and may also cater to students studying scarce skills.

Private student loans are typically more expensive. Companies that offer these loans make a profit their top priority. It usually follows stricter lending criteria, so don’t expect it to provide a loan forgiveness program; it is rare.

Find out what your best options are by first completing your federal NSFAS application. If you qualify for financial aid or state scholarships, you’ll find out after completing this application, and your options will become clearer.

If you’re applying for a grant, like the Penn Grant, the NSFAS application will generally tell you whether you qualify for it or not.

Don’t stop there, though. Speak to your school councilors and find out if there are any scholarships for school alumni. Check if the university that you plan to attend offers aid and check online for national and state bursaries.

Once you know what assistance you qualify for, you can make an informed decision about which loan option is best for you.

College Finances And Tips To Avoid Getting In Significant Debt

College is about more than just learning—it is the first time that you’re out on your own. Your mother won’t be downstairs to tell you to do your homework.

Life on a college campus is a lot of fun, and there are plenty of activities to experience. It’s easy to get caught up in the journey, but it might also be deadly for your financial future. You’ll have to make some hard choices.

Is there a college campus near your home? Staying at home while studying isn’t the coolest option, but it can save you A LOT of money. While your sorority friends might make fun of you, the joke’s on them in the end—you’ll pay your loans off faster.

Another tough decision is whether to work and study. No one wants to be a college student who has to juggle work and college life until the time comes to start paying back the loans.

Sacrificing some of your free time to earn some money is a smart way to go. Maximize your gains by being careful with your money and look for ways to have fun that are free. If you’re living off-campus, make sure that you’re paying the best rate for all your services.

Find out which electric shop offers the best rate on power, for example. Do they offer student discounts? From there, move on to your other expenses.

Can you walk to class to save gas money? What about brown-bagging lunches?

Make saving money a fun game, and you’ll reap the rewards with a lucrative future.