Unbelievable Reasons Not To Pay Off Your Student Loans July 19, 2016My MoneyOff

Most people will look at the title and think that it is a long way off base. Surely you have to pay off your loans as quickly as possible? If you ask the government, they will tell you to pay them off ASAP. But, the government has an agenda because they are lenders that want their money back. The following reasons will show you that it isn’t vitally important to pay off your student loans quickly. There’s one good reason already: it will save you a fortune!

No Mandatory Repayment Scheme
The best reason not to pay off your loans is that you don’t have to pay off your loans. The government has a lot of caveats when it comes to repaying your loan as they know everyone can’t pay it back immediately. As a result, they don’t expect you to start making the payments until you earn a certain amount. Even if you have the money, there is no point in making a payment that you don’t have to make. It is an unnecessary expense and a good way to waste money.

Small Repayment Costs
Even when you do have to pay the money back, it is only a small amount. Sure, the money will come out of your wage every month. However, it is about a couple of percent of the cost of the overall loan per month. Most people that do pay their loans back pay less than one hundred dollars a month. In the grand scheme of things, it is a very small amount of money. Plus, as you have to earn a certain amount, you will be able to afford the expense.

Low-Interest Rates
Okay, there are interest rates that you have to deal with when you take out a student loan. So, in the long-term, the interest will mean you have to pay more. The thing is, the rates are very low with regards to interest. Or, they are for most students. In a few decades, you might only add a couple of hundred dollars to the overall amount. When you look at it analytically, the cost isn’t worth paying back thousands in one foul swoop. For those that are unsure, you can take a look at this student loan interest rate guide. The guide will teach you everything you need to know about student loans and interest rates.

It Doesn’t Harm Your Credit Score
Every debt has an effect on your credit score, yet your loans aren’t like any other debt. The big credit companies treat student loans as installment plans, and they are very different to normal loans. For the most part, a bank or lender won’t even know that you have a loan unless they ask. If it is on the application form, it will show up in the report. However, it won’t if you don’t mention it which means it won’t affect your credit score.

They Are Wiped After A While
The government isn’t as bad as a normal lender when it comes to the repayments. They don’t chase you around the world or take your house as security. After all, they have bigger issues to solve. After a few years, most governments wipe the debts. If you don’t earn enough or leave the country, you might not have to pay a penny.

Photo by Docent | Shutterstock

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