When we talk about student loans, there are many students who have certain misconceptions in their mind, and they live with it. This is not the right thing to do because it can have a negative impact on your future and you’ll only have regrets at a later date. So, if you are planning to get a student loan in your name or you wish to learn about student loan misconceptions, keep reading and get rid of it.
1. You can we pay your student loan anytime
Although there is a certain level of truth in this misconception, you should understand that the longer you stretch your student loan, higher will be the amount of interest, and that is not a good thing for you. Many students make the mistake of dealing their student loans, and they feel it is not an issue. This is not true because dealing your student loan will not only increase the amount of interest you end up paying but can also reduce your chances of getting another loan in the future.
2. Refinancing student loan can create problems for you
Student loan refinance been an option for most of the students, but many students feel that if they ask for refinancing, they will fee and number of problems in the future. This is not true because refinancing gives you an option to switch over to other loan options that offer you better interest rates. In case of your first student loan, it is possible that you might have taken that without thinking twice and had no idea about analyzing the advantages and disadvantages of a particular loan. If you have realized it now, there is an option for you to refinance your student loan and make sure that you do not make a mistake this time.
3. Refinancing and consolidation are the same
Students often make mistakes in this case because they feel that there is no difference between consolidation and refinancing. However, there is a huge difference between the two, and you should know that refinancing helps you in switching over from one loan to another which can be beneficial for you. However, in case of a consolidation, you’ll only get an option to consolidate your loans. Also, only Federal student loans can be consolidated. So, understand the difference and act accordingly.
With consolidation, your new interest rate will be applied to the average weighted interest rate you have been paying on your old student loans. In case of refinancing, a new loan is opted for and accordingly a new interest rate will be provided to you.