School Loans 101: bank loans

30.11.08

New Graduates - Reduce Your Debt!

There are steps that you can't afford to neglet when reducing debt, to prevent the cow from stealing your hard earned cash:

1. Pay off your credit cards in full. If you can't afford to spend the money don't, wait until you have the cash in your bank. With credit card rates anywhere from ~18% - 25%, you can't afford to milk that cow.

2. Contribute to your retirement. If these contributions aren't already deducted from your salary, create your own plan. Put yourself first.

3. Create an emergency fund. Typically 3-6 months of your living expenses should be put aside yet again, for you!

4. Budget your money. Sometimes it takes recognizing where your money is being spent for you to acknowledge un-needed spending.

5. Pay down your loans in bi-weekly payments. Reduce the amount of interest you will pay over the term of your loan.

6. Make a habit to compare prices including your insurance. The market is competitive and prices WILL change.

7. Review your credit report. This is offered free once a year.

8. Invest. Invest. Invest.

Student Line of Credit

A line of credit is a loan from the Bank. Unlike a regular loan for a fixed amount, the Bank doesn't provide you with the full amount of the loan at once. Instead, the Bank establishes a "credit limit" for you as the maximum amount you can borrow. As you withdraw, the available credit reduces. However, as you pay the money back, the amount available for withdrawal increases. You control how much of your credit limit you want to withdraw and when.

You may have both a Government Student Loan and a Student Line of Credit if you qualify.

The banks allow students to defer payment of principal for up to one year after graduation. Although you must make interest payments on the borrowed amount during this period, you have time to complete your studies and find employment before starting to repay the principal.

Visit the following financial institutions for specific details: