One of the strongest belief of our company is that financial health of the nation depends on the financial health of all its citizens. And while the future of the country is in the hands of the young generation, we challenged ourself to try to improve financial literacy.
To do this, we are providing a scholarship to a student who would submit the most original essay and video on “How to Build Healthy Borrowing Habits”, demonstrating a good understanding of economic aspects of the subject. And now we would like to share with you the essay and video that we liked the most.
How to Build Healthy Borrowing Habits
Many of us as human beings face the challenges of financial pressure. As responsible adults, we are given the option to ease the pressure of finance by borrowing. Through childhood, when you did not have something that you wanted, you asked someone for it, right? Well, this is the same concept with an extra degree of complexity. We are going to explore the fundamentals of achieving good borrowing techniques and maintaining healthy financial habits. When we are done, you will understand the terms of the agreement, and how to officially navigate and negotiate the maze, that is, borrowing funds.
Usually, one should borrow funds based upon the need of those funds and, as a student, there should be a more or less universal amount charged for tuition specific to student alumni. Therefore, the lenders may operate on a set value that will cover all expenses needed for tuition & books, and the borrower can allocate additional funds through other sources as well. Keep in mind that loans must be repaid. Do not borrow more money that you can provide. Is it good for you now? Will it be better or worse later in life? When choosing the loans that exceed your needs, be mindful of margins, deadlines, interest rates, taxes, and others variables that have a direct impact on your purse.
The interest rate is how much the initial repayment amount increases over a set period. Interest rates are calculated and by percentage, are usually added as an annual fee. They vary from source to source and have no limit, so be careful which lender you choose to sign with. If you can help it, try to steer away from predatory lenders who will target your need for financial aid as a means to bamboozle you out of valuable money that you could save instead of struggle to repay. As sure as there is an interest rate, there is also a repayment period.
Let us assume that the period of repayment is ten years which means the total amount due for repayment will be divided into 10 annual payments and each payment will have accrued the interest from the total amount tacked on to it until the loan is repaid in full. Repayment policies are always changing, always renegotiated, so it is especially important to know the different methods of easing your way out of debt. Lenders can choose to offer a contract that enables you to only pay back half of the amount, and they can write off the other half in taxes. Another viable repayment option is to repay a minimum amount until financial stability is achieved, and then to upgrade the loan to repay a bigger amount, therefore lowering interest and the overall length of time and subsequently the money that has to be repaid back.
Put yourself first. Do not enter into a loan agreement that will end in disaster for you and your family. The current circumstances that you face are important when borrowing. Try to have a clear conscience when signing an agreement. Convince yourself that this loan is the best option for you and do your research. It is imperative that you understand your goals and what you plan to do with the money. How long will it take to achieve these goals and how will the obstacles yet faced interfere with repayment or income. Goals, not unlike responsibility, are something worth striving for.
What are your duties in addition to repaying the lender? How do they relate? How are they different? Do they contrast to the point of disinterest or will you create an action plan incorporating all of these into a viable financial arrangement for your well-being? Is your financial stability in question with regards to the future and are you willing to make sacrifices if necessary? What is more important to you? Will you strive and struggle to achieve, will you look for help, will you accept help where it is given in the way it is provided, or not? These are basic building blocks of financial discipline and are incorporated in healthy borrowing management practices.
Once you have psyched yourself up to go for what you have deemed to be worth partaking in, do not rush it, there is still time to prevent the major mistakes that many borrowers have made, and to set up a series of safeguards to protect your wallet. Ultimately, the decisions of personal financial planning depend on each person, though you are an individual, you are not alone. Have solace that the economy is based on incorporating new identities into its framework so that it may in turn surprise, build, multiply, and expand. If it helps to ease your mind, you should know that there are also loan forgiveness programs that reserve the right to pardon any or all loans given to honorable students that have achieved a certain level of premiership among students.
Not to mention, there is also a method of discharging loan debt if a seemingly catastrophic or certified event or shortfall should prevent either your completion of credits or repayment of funds that you have received. Before signing any loan applications, check around to discover if your lending organization has had many issues with recovering loans granted. Are they willing to work with those who have trouble during repayment? Are there many complaints by borrowers against the lender? This type of perseverance in background information is imperative. The loan company does a lot of background checks on you, so why should you refrain from checking them out as diligently as you would say, daycare for your newborn baby? And lastly for this purpose, analyze whether or not these matters would apply to your situation and what you could do to resolve problems if they should arise.
With this approach, receiving a school loan is much like investing in yourself, in your future. It is one of the most important decisions you will ever have to make. Set yourself up for greatness. No one is Superman. No one can do it all. Choose the supplements that fulfill the void in your portfolio. Search for loans and grants from companies that may hire you, as many do after you complete the course studies. Employers may choose to forgive a large chunk of the loan if you commit to working for them. Take out loans that are safe. Do not be a daredevil with your well-being as a career is the tip top point of the nutritional pyramid.
Financial health as some would say is above all. After working so hard for 3 or more years towards your degree, you may want to take a break, perhaps a long vacation. When the loan company issues a loan, they usually don’t demand annual or monthly payments, whatever may be the arrangement, until you have graduated from the program. In most instances, the first payment may be 3 to 6 months after the scheduled completion day which can also be changed when working with experienced and understanding lenders. Have a good idea when payments will start, and how long it will take you to find sufficient employment, whether or not you want to take a break after school, and how it will mesh together with the picture of your future that you have been painting throughout your studies. Do not buy the most expensive paint. Do not take out extra loans to buy expensive brushes. Masterpieces are made with bare hands and feet. Downright determination and perseverance is undoubtedly beautiful. Do not fret; you have got a payment due soon.
Sticking to the plan now will ensure your ability to pay up. Remember, the money that you pay is added as a positive value on your credit report, and therefore computes to more money for you. Credit is worth more than cash. It is time to know your stuff. You can do this. Continue forward and keep up the good works.
Name: Edidem Christopher Ekpoudom
Institution: Clayton State University
Degree: Bachelor of Applied Science
Subject: Administrative Management
Graduation Year: 2022