College and university graduates finish their education with great hopes of a bright future but find themselves being weighed down by years’ worth of student loan debt.
In the United States, student debt is approximately $1.68 trillion, and this amount multiplies six times faster than the country’s economy. According to the Consumer Finance Protection Bureau, the payment term for a loan is 10 ten years.
While student loans might seem like a feasible option for many who want to pursue higher education, here are some things you should know:
1. Your Dream Career May Have To Wait
With a student loan debt in place, you might have to reconsider your daily living expenses. This loan can affect your standard of living and act as a deciding factor for which dreams or goals you can achieve and which ones you’ll have to keep on hold.
When searching for a job, you might have to choose one that offers a higher salary than one that helps you build your career. Students often keep their careers on hold and work full time to resolve the student debt they’re drowning in.
2. You Might Not Be Able To Purchase a House
If you’re looking to purchase a house, getting a mortgage can be a real challenge due to your outstanding debts. The lender might not approve your application, as your credit report will highlight late payments. If you’ve not paid your student loan on time, then this can be held against you.
Additionally, when applying for a mortgage, this payment should be within 28% of your income. With student loans, this amount will most likely exceed the maximum.
3. Student Debts Can Lower Your Net Worth
Students with debt have a lower overall net worth as compared to those who don’t. For example, reports show that the net worth of a graduate with student loan debt was $8,700, but the net worth of a graduate without debt is seven times higher.
4. Bankruptcy Won’t Solve the Problems
You might wonder if bankruptcy will help terminate the loan, but this might not be true in the case of student debts. This loan debt will stay with you until you pay it all off.
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Student debt loans can lower your credit score, which means higher interest rates in the future. Our experts at Oak Credit Repair can help with all your credit problems. We’re a renowned and reliable credit repair company that offers affordable credit repair services throughout the US. For more information, give us a call at (888) 625.2264 or fill out this form for a free consultation with our credit repair-consulting experts.