Is a student loan a good loan?

Dixie Kling asked a question: Is a student loan a good loan?
Asked By: Dixie Kling
Date created: Thu, Jul 8, 2021 5:23 AM

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Those who are looking for an answer to the question «Is a student loan a good loan?» often ask the following questions:

✔️ Is discover student loan good?

Discover student loans are a solid option for those who have maximized grants, scholarships and other free financial aid and want a lender that offers a number of loan types and a loan consolidation option. It's also a good choice for those interested in earning cash back rewards for maintaining good grades.

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✔️ Is discover student loan a good loan?

In addition to its well-known credit card products, Discover offers a range of competitive private student loan options. Low rates and no fees make Discover's student loans worth consideration. Discover is best for high-performing students or those looking to fund multiple years of school.

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✔️ Is 401k loan good for student loan debt?

1. The interest rate on a 401(k) loan is lower. Interest rates on federal student loans are generally low, and may also be lower than the interest rate on a 401(k) loan. But if you have a private student loan from a bank, you may be paying a higher interest rate.

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Put another way, students are usually better off with loans than without them, everything else being equal. Private lenders won’t take that risk, however, at least not on a large scale at...

Americans of all age groups have a debt of about $1.56 trillion in just student loans and this comprises 45 million money borrowers. And this debt is $521 billion more than the total credit card debt that the citizens owe in the USA. At the end of the day, a student loan is a good or bad debt that depends on an individual.

Instead, let’s consider both the benefits and drawbacks to student loans. Is student loan debt good? Yes, when … Student loans allow you to pursue a college education without having to pay for your entire tuition in full. With a college degree, you improve your chances of finding well-paying, stable employment. Some federal loans are subsidized. If you qualify, you’ll have your interest paid during select periods of time.

If you were making your student loan payments on time, your credit score was likely improving. Once you pay your loans off, that credit boost comes to an end. And, because student loans are installment loans, they add variety to your credit portfolio. This variety accounts for 10 percent of your FICO score.

The evidence on educational loans, however, is telling us something different - that the use of student loans helps students earn a degree and pay down their debt – and that some students would benefit from taking out more loans. These studies tell us that the original rationale for government-issued student loans is sound.

When it comes to borrowing money, student loans are similar to mortgages in that they are usually considered “good debt.” Both are large amounts of money that take a long time to pay back. By paying it back each month, you show the lender your ability to repay a loan and prove your creditworthiness, which can in turn increase your credit score.

But, believe it or not, not all debt is bad, and many financial experts call student debt good. It all comes down to what you get out of it. Debt is considered good when what you get out of it (the return) is higher in value than what you put in it (the cost).

Although the federal loan interest rates will generally be less than private loans, the federal loan amounts may not be enough to cover your entire college tuition. In this case, many students turn to private loans. Currently, the industry average for these loans is 9% to 12%, but in many cases, lower rates may be found.

For some, cancelling student loans is the panacea to stimulate the economy and save a generation of borrowers from financial ruin. For others, cancelling student loan debt is one big, misdirected...

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We've handpicked 25 related questions for you, similar to «Is a student loan a good loan?» so you can surely find the answer!

Is student loan debt good debt?

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So, even if you could pay cash for a home, your financial future might be brighter if you left that money invested. Student loans, mortgages, and small business loans are the most common forms of good debt.

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Is student loan good or bad?

They can be considered good debt because the money you're borrowing to attend school is your ticket to earning a degree and getting hired at a well-paying job… In fact, student loans may be the hardest type of debt to narrow down to simply “good” or “bad,” since everyone's financial and lending needs may differ.

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What are good student loan companies?

Sallie Mae is one of the largest and most reputable student loan companies offering both undergraduate and graduate student loans.

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What are good student loan rates?

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Best student loan interest rates in May 2021

LenderFixed APR*Loan Amount
SoFi2.99%–6.94%$5,000–full balance of education loans
EarnestStarting at 2.98%$5,000–$500,000
Laurel Road2.80%–6.00%$5,000–full balance of education loans
CommonBond2.59%–6.74%Up to $500,000

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What is a good student loan?

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The average student loan interest rate is 5.8% among all households with student debt, according to a 2017 report by New America, a nonprofit, nonpartisan think tank. That includes both federal and private student loans — about 90% of all student debt is federal.

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What is good student loan interest?

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Federal student loan interest rates 2020-2021

2.75% for undergraduates. 4.30% for graduate students. 5.30% for parents and graduate students taking out PLUS loans.

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Why student loan debt is good?

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Debt is considered good when what you get out of it (the return) is higher in value than what you put in it (the cost)… Because that debt has the potential to earn you money, the return will be greater than the cost, making it good debt. The same idea can be applied to student loans.

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Is navient good for student loan a federal loan?

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Navient is one of the largest federal student loan servicers. It also services private student loans from various lenders… Most student loans are federal. But if you're still unsure about whether your student loan is federal or private, the best way to find out is by logging in to studentaid.gov with your FSA ID.

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How good is challenge student loan debt?

Overview. In a 2019 poll conducted by the opinion and market research company SSRS for The Pew Charitable Trusts, 7 in 10 Americans said that taking out a student loan is a reasonable choice given the benefits of a college degree, but 89 percent also expressed concern about people’s ability to repay those debts.

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How good is earnst student loan refinance?

Private student loan The bottom line: Earnest is an online lender that offers student loan refinancing and private student loans, as well as personal loans. Its refinancing loan is best for...

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How good is osla student loan consolidation?

How Good is OSLA Student Loan Consolidation? OSLA student loan offers a good student loan consolidation plan for students with federal loans. A student loan consolidation allows you to take a new loan to pay off other existing student loans. That is OSLA makes it possible for you to consolidate all your federal loans and make them just one. How Long is OSLA Student Loan Repayment?

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How to find a good student loan?

  • 1. Credible. Credible is our #1 pick for the best private student loans because they are a comparison tool that shops all the major private loan ...
  • 2. Earnest.
  • 3. Ascent.
  • 4. LendKey.
  • 5. CommonBond.

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Is 4 interest rate student loan good?

Currently, the industry average for these loans is 9% to 12%, but in many cases, lower rates may be found. It’s also vital to check if the private loan has a fixed or variable APR. A fixed interest rate will not change over the lifetime of the loan while a variable rate will change over time with the market.

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Is 4.66 good for student loan debt?

We are basing our average student loan interest rate on the fact that the average federal interest rates on student loans are 4.66% for undergraduates, 6.22% for graduates, and 7.27% for parents and graduates getting PLUS loans.

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Is a sallie mae student loan good?

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The bottom line: Sallie Mae was originally founded in 1973 as a federally guaranteed student loan program. Today it makes private student loans, but it stopped servicing federal loans in 2014. Its...

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Is a wells fargo student loan good?

Student Loans at Wells Fargo. Wells Fargo is a good choice when it comes to student loans. With a variety of private and federal student loan options to choose from, borrowers are sure to get the best loan rate that fits their educational needs and budget.

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Is discover a good student loan lender?

Discover has a 4.5 rating out of a possible score of 5 from NerdWallet for its refinancing and private student loan products. How long does it take to get a Discover student loan? The typical time from completed application to approval for a Discover student loan is 15 minutes.

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Is having student loan good for credit?

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Student loans affect your credit in much the same way other loans do — pay as agreed and it's good for your credit; pay late, and it could hurt it. Student loans, though, may give you extra time to pay before you are reported late… The lender reports this to credit bureaus, and you begin to establish a track record.

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Is lendkey good for student loan refinancing?

Overall Rating: 4.1 / 5 (Excellent) LendKey is a fast and easy way to shop around for the best refinancing option by matching applicants with several credit unions and community banks, which can offer lower rates. What sets is apart from most other student loan refinance marketplaces is that it services all refinanced loans in-house.

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Is sallie mae a good student loan?

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Sallie Mae's undergraduate private student loans are best for those who want flexibility with repayment. For example, Sallie Mae offers lower interest rates to borrowers who make monthly $25 payments or interest-only payments while in school.

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Is sally mar a good student loan?

Sallie Mae’s private student loans are best for those who want to be rewarded for making payments while in school. For example, Sallie Mae offers lower interest rates to borrowers who make ...

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Is student loan consolidation a good idea?

When consolidating student loans is a bad idea. While there are some good reasons to pursue this strategy, consolidating student loans isn’t always a good idea. Note that we’re referring to direct loan consolidation here, which involves combining your federal loans and choosing a new repayment plan.

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Is student loan consolidation a good thing?

Consolidating multiple student loans can be a good way to simplify payments. If you have both federal and private loans, you can consolidate them separately or combine them into one new loan. Before you consolidate, make sure you understand the long-term financial implications of any new loan and consider alternative scenarios.

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Is student loan consolidation good or bad?

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Consolidating federal student loans may be a good strategy to lower monthly payments or to get out of default, but it is not always a good idea… Loans that are not eligible for consolidation include state or private loans that are not federally guaranteed. Interest rates for consolidation loans are fixed.

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Is student loan debt bankruptcy a good?

When student loan payments get burdensome, the idea of discharging your loans altogether through bankruptcy may start to sound like the next best option. Through bankruptcy, you would be completely...

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