Misinformation and misconceptions abound when considering student loans. Confusion may reign supreme. Be sure to separate fact from fiction.
Protect your finances; mistakes can be very, very expensive.
Let’s consider some conventional wisdom…
1. Only borrow what you need. When applying for student loans, you may be offered more than you need. Conventional wisdom says take no more than needed. Seems logical; but, conventional wisdom may not be right for your particular situation.
2. Carefully consider refinancing student loans. If only conventional means of repaying student loans exist, than conventional wisdom would protect the benefits of the loans taken even though repayment may take 20 to 30 years, or more. If a refinance results in a lower interest rate, a lower monthly payment, and a shorter repayment term AND you have an unconventional way to repay the loans at an even faster rate, then conventional wisdom may not be right for your particular situation.
3. Federal student loans have the lowest interest rates. Conventionally, federal student loans usually offer the lowest rates. But, such loans may not rise to the level of funding needed. Private loans may result in a higher available amount and a lower interest rate. In either case, employing the right repayment structure is of the utmost importance. Typically, the right repayment structure will be unconventional.
4. Don’t worry about paying back your student loans while in school. Surprisingly, this conventional wisdom makes sense; provided, however, you have employed an unconventional strategy for repaying them. Otherwise, another strategy might be better suited to your circumstances. Our clients, however, harbor no worries or concerns about repayment, as they have adopted an unconventional repayment plan.
5. I’ll never pay off my student loans. Under currently offered conventional repayment plans, it will certainly seem that way. Especially, since repayment can last up to 30 years or more. Unconventional repayment plans can result in full debt payoff in one-third to half the time.
Obviously, the best time to start considering repayment plans is before you take the loan(s). Before acting on misinformation and misconceptions, contact the professional college planners, The Money Architects at Vivensure, to discuss the unconventional way in which your family should consider student loans.