A personal loan is a type of unsecured loan that can be used to meet a variety of end uses such as funding an expensive trip, wedding, medical treatment, home renovation, and any other financial requirement. The burden that arises upon having to repay one’s loans can be overwhelming especially when one is just starting out one’s career.
Student loans can become a huge stressor on one’s finances, especially if one takes a long time to pay off their debt. However, there is a way to reduce this burden, particularly when one uses a personal loan to consolidate one’s debts. Here are a few ways in which a personal loan can aid you in paying out any student debt you may have.
Often various financial institutes provide personal loans at a highly competitive interest rate. In many cases, it is often much less costly to repay off one’s personal loan than one’s student loan. Also, keep in mind that the tenor to pay off a student loan lasts between fifteen to twenty years, while the tenor for a personal loan is often much shorter, and goes up to a maximum of five years. Hence, if you pull up your calculator to find out the amount of money you are paying in total, you will not be surprised to learn that you end up paying a lot less in student debt when you pay it off through a personal loan.
Consolidation of Debts
It is not unusual for a student to take on more than a single loan. There can be a loan for graduation, and another for post-graduation, with yet another taken for one’s personal studies. You have the option to consolidate these loans to make one fixed payment, at an interest rate fixed, by taking only a personal loan that will pay off your student loans. A single monthly payment means that it is easier for you to plan out your budget.
Releasing the Co-signers
In a student loan, it is required that someone stand in as guarantor or co-signer of the loan. As a student one is not deemed eligible to avail of the loan by oneself. In fact, you must ask one of your family members to share the liability of taking on the loan with you. Once you begin earning for yourself after your graduation, you might feel obligated to release your co-signer of their liabilities as soon as you can. This is where personal loans come into the picture.
Keep in mind that personal loans are unsecured in nature. It is not required that one avail of a guarantor or collateral to avail of the loan. Ensure that you prepare by taking a personal loan eligibility test before you apply for a personal loan. Ensure you pick a loan provider that offers a flexible replayability tenor, minimal documentation for signing up, instant approval within a matter of minutes, and zero hidden costs for borrowers.