Good vs Bad Student Loan Debt
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What Is Good Debt?
What Is Bad Debt?
Are Student Loans Good or Bad Debt?
Examples of Bad Student Loan Debt
High-interest student loans Variable-rate student loans Student loan debt that exceeds a profession’s top salary
Examples of Good Student Loan Debt
Fixed-rate federal student loans Student loans that are eligible for loan forgiveness (assuming you work toward it) Student debt that’s lower than your career’s top salary
Pros and Cons of Taking Out Student Loans
Tips for Paying Down Your Student Loan Debt
Make interest payments while in school. While you’re enrolled in school, your loan payments are automatically deferred. However, if you could make interest-only payments toward your loans during this time, you’ll avoid capitalized interest (which is paying interest on your interest) when you start making full payments after graduation. Stay on the standard repayment plan. This plan is designed to allow you to repay your loan in the shortest amount of time (10 years) with the least amount of interest. However, it requires you to make the highest monthly payment among the other available repayment plans, so you'll need to be able to afford it. Student loan refinance.Refinancing replaces one or more of your existing student loans with a new student loan. The new refinanced loan will have a different rate, ideally lower, and new repayment terms. Although refinancing student loans is possible for federal loans as well as private ones, be cautious when doing so. When you refinance a federal student loan it becomes a private loan, and you are then ineligible for federal borrower protections and programs, like loan forgiveness and flexible repayment options.
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