We’ve Done The Research: The Pro’s And Con’ Of Student Loans

Student loans can be a great resource for many, but also come with their challenges. If you are having trouble paying for unexpected bills while trying to get your education, consider taking out an emergency personal loan so you get the money you need as quickly as possible. However, you should be aware of both the pros and cons to these loans.

The Positives

  • They can help you finance your education. Without student loans, many people would not be able to attend college or university. 
  • Student loans can help you cover the cost of living expenses while you are in school. This can be a big relief for students who are struggling to make ends meet. 
  • Also, student loans can help you build credit. If you make your student loan payments on time, it will help you establish a good credit history. This can be helpful later on when you are looking to apply for a mortgage or a car loan.
  • Student loans can allow you to defer payment until after you graduate. This can be helpful if you are not able to find a job right away or if you want to go back to school for further education. 
  • Finally, student loans can provide tax benefits. The interest that you pay on your student loan is tax-deductible, which can save you money at tax time. 

Overall, student loans offer several benefits that can help you finance your education and build your future.

The Negatives

  • If you miss student loan payments, it will hurt your credit score. 
  • Additionally, if you have to defer or forbear your student loan payments, this can also negatively impact your credit score. 
  • Finally, if you consolidate your student loans, this can also lead to a temporary dip in your credit score. 

However, as long as you make all of your payments on time, student loans should not have a lasting negative impact on your credit score. 

Additionally, the amount of debt that you have in student loans can affect your credit utilization ratio, which is the amount of debt you have compared to the amount of credit available to you. A high credit utilization ratio can negatively impact your credit score. Therefore, it is important to make sure that you are making student loan payments on time and keeping your debt-to-credit ratio low to avoid any negative impacts on your credit score.

While student loan debt can feel overwhelming, there are some steps you can take to pay it off. 

First, try to make room in your budget for extra payments. Even an extra $50 per month can make a big difference over time. If you can swing a larger payment, great! But don’t sacrifice other important financial goals, like saving for retirement, to make student loan payments. 

Another good strategy is to target the loans with the highest interest rates first. By knocking out these loans first, you’ll save money on interest in the long run. You may also want to consider consolidation or refinancing if it makes sense for your situation. 

By working proactively to pay off your student loan debt, you can get closer to financial freedom.

Photo by Andrea Piacquadio from Pexels


  1. The value of a 401(k) plan is that it allows you to invest money into your retirement fund before taxes are taken out of it. If you have a 401(k) plan, you have the option of deciding how your money is allocated. In other words, you can decide if you invest in stocks, bond or money market investments.


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