Does “Good Debt” Exist?
Student loans are often referred to as “good debt.” But 40% of borrowers with student debt report putting off major purchases or life choices because of their student loans. So, is “good debt” really good if you have to put your life on hold?
Types of Loans.
There are three types of student loans: federal, private, and parent. Federal loans make up 92% of the staggering $1.3 trillion student loan market. These loans are structured with a one-size-fits-all interest rate regardless of an individual’s credit or earning potential. These loans are designed to allow everyone to get access to education, but are not necessarily the best way to recognize and reward superior borrowers.
Private loans from a bank, credit union or institution typically require a credit check before being offered. Private loans can be the most expensive type of loan with some interest rates as high as 12%. They sometimes have penalties or fees for paying off your loan early.
The last type of student loan is a parent loan, which is just what it sounds like: parents taking on debt to help their children to attend college. These loans can be federal or private.
By today’s standards all of these loans have high interest rates and don’t take into account a very important factor – you.
Thanks to you.
We are able to offer lower interest rates because of you. Our borrowers have saved an average of $427 per month, about the same as the average monthly car payment – because we take into account your credit score, salary, job type, and education to give you the lowest rate you qualify for today. Student loans can only be good debt if they help you achieve your goals at the least cost. Our customization means you can find your savings – and choose whether to lower your payments now or save thousands over the life of your loan. You decide!