4 things no one tells you about student loan debt

Like many other students, you may have taken out a student loan without thinking twice. Who wouldn’t? It’s “free” money at the time, and you don’t have to worry about paying it back till you’re done with college.

Unfortunately, student loans can quickly turn to bad debt if you fail to pay them on time once you’ve graduated. Currently, graduates owe $1.5 trillion in federal student loan debt, which has created a student loan crisis.

Student loan debt affects not only your financial future but also impacts your credit rating. Therefore, while taking out federal student loans helps you go through college, failing to pay can have adverse consequences.

Here are four things no one tells you about student loan debt.

1. Your interest accumulates first

When you default, your interest accrues over time, making your loan expensive in the long run. Hence, even when you make payments, your loan amount may not go down since your interest has accumulated.

2. You may have to find another source of income

With student loans, the earlier you pay, the better. Long repayment plans may have lower monthly payments, but they stretch out your payment for a long period, making it more expensive. To avoid this, you may have to take a second job to afford paying your student loans on time.

Another source of income can also help you with other expenses such as food, rent, and clothing.

3. You have to cut down your expenses

If you have multiple student loans, the majority of your paycheck will go towards your loans. This forces you to cut down on your living expenses.

4. You’ll not buy a home

Although this isn’t impossible, with student loans, buying a home becomes more difficult. This is because when you fall behind, your credit score drops, reducing the likelihood of loan approval. And, even if you qualify, your interest rates will be high.

Ultimately, you should strive to pay off your student loans as early as possible to avoid these consequences. Contact StudentLoanify today for more information about student loans and student loan repayment options.