5/28/08
Abby on Loans
My topic for the first financial project is loans. I do not have much knowledge about loans but i do know some basics. I have a federal subsidized loan right now for my college tuition. This type of loan is interest free until 6 months after I graduate. I am going to make sure to have enough money in savings to pay the balance of the loan within the 6 months after I graduate so I will have no outstanding student loans to pay off. I have all my money in interest earning savings accounts and CD's right now so i can avoid having student loans to pay off in the future. This is only one type of loan and there are several types that can severely hurt your financial status while others can help you. For example I could pay off my school now with out using the subsidized loan but I am keeping my money in interest earning accounts while I can. So I am actually making money in the long run. If my loan was charging interest I would rather pay it off now so I wouldn't be losing out in money. If any of you have other types of loans, or know information or other loans let me know!
Subscribe to:
Post Comments (Atom)
7 comments:
Abby, you are a savvy consumer. Was it your idea to put your loan repayment money in an interest-earning account?
Also, when I started grad school, I was offered subsidized and unsubsidized loans. But, I was offered more in unsubsidized. Did this happen to you? If so, what made you turn down the unsubsidized loans?
Wow thats really good to know about how your actually making money from your loans.. I'm just doing a community college now here on the shore which is all paid for by the scholarships I have gotten, but next fall I will be transferring to Towson. Thats when I will definately need the loans and right now I'm major confused about how to go by doing it so I will definately look into doing it the way you are! :)
Well Abby I'm inpressed, that was some good thinking you had. Normally college students will forget about paying off loans until the last minutes which is how you get into trouble. I've also became big in to high interest CDs I'm happy to see someone else basically getting free money. Loans though I dont know much about I have a few scholarships to pay for college and my job will pay for classes related to my job. You definately need to teach me more about loans when you are done your research.
Well Natasha my mom has had CD's for me since I was little and she has kind of taught me and raised me to save and look for high interest rate CD's and savings accounts. So it is partly her and partly me wanting to save and make more money in the long run. I was only offered the subsidized loans, but I will look into a unsubsidized loan because i do not know what that is.
Hey, Abby! I agree on your decision to put your money in interest earning savings accounts and CD's. That's a good plan. Stick to it!
I have a loan called a share secured loan. It is helping me to establish credit. To get this loan, I had to put an equal amount of money on hold in my savings account. As I pay back the loan, the money is released from being on hold for me to use. The loan cost me only a small amount of interest. My other way of establishing credit will be to get a credit card in my name only.
I had never heard of subsidized loans till reading your blog. In the future, I'm going to try to get one to help me pay for beauty school.
Abby, you bring up a good point regarding keeping your money in interest earning accounts while your loan is not charging interest.
Another thing to keep in mind is the "interest factor" can be used for a lot of different things.
For example, it would not make sense to have $500 in a Certificate of Deposit earning 4%, if you had $500 in credit card debt charging 15%.
You always want to look at the interest rates. If you can find a savings vehicle that earns more interest than a loan, you would want to save as opposed to paying off that loan early.
The money you make is the difference between the interest rates!
Gwen,
Thanks for bringing up the savings secured loan; its a great to establish or rebuild your credit!
Abby...you know more than I do about loans, I'm still young. Right now I never had the need for a loan. I work 2 jobs and save pretty well. With loans and their interest rate, I just don't find the need to pay twice the amount for something that I want. I have a wierd motto, if I can't afford it then I must not need it. Its not financially smart though....maybe you can teach me some of the basics for loans.
Post a Comment