Welcome, to the world of borrowing money. At an early age, you might have watched your parents borrow money and discovered the trouble that it brings. You may well have sworn just to avoid borrowing money completely. Instead, you will only spend what you have. Does that sound familiar? While it’s an admirable ideology, it’s just not possible in today’s society. There are key stages in life where you will always need to borrow money. Some costs are simply too great for you to handle by yourself, even if you are already earning an income. Let’s look at some of these stages and think about the best ways to deal with them as well as why you need to borrow.
Higher Education
You’ve just got your college acceptance letter, and you are thrilled that you’ll soon be walking down the road of higher education. It’s a great time, filled with new experiences, self-discovery and of course, learning. However, it’s also a costly experience. Medical students will leave college with debt ranging in the hundreds of thousands. The good news is that you’re not alone, and almost everyone leaves higher education with some degree of debt. The bad news is that doesn’t make it any easier to deal with. You have to be smart and think about how much you need to borrow. You then need to consider the types of loans that you can get and which one you need. For instance, you’ll need to know about subsidized vs unsubsidized loans. If you get one that’s subsidised part of it will be paid by someone else, so it’s easier to deal. The trick to handling your student loan is finding the right repayment plan, and there are a lot more options than there used to be.
Moving Out
You’ve finished college, and if you didn’t take a degree in philosophy, you’re not moving back in with your parents. Instead, you’ll find your own place. But again, you probably won’t be able to pay this by yourself, unless you’ve already got savings. If you have already secured a job, you might be able to handle the rent and the bills. However, you’ll also need to pay an application fee, a deposit up front and maybe a few more on top of that. It all depends on the landlord. In this case, it’s best just to borrow from your parents. Unlike a loan company or bank, they won’t charge interest.
Moving On Up
Once you have a job that you can count on for a permanent income, you can start to think about buying your first home. The market has just taken a massive hit so it’s a good time right now. House prices are expected to fall shortly and if you don’t already own property you’re in the perfect position to buy. That is of course if you have a sizeable amount in savings. You’re going to need at least twenty-five percent of the asking price to put forward as a deposit. The more you have, the better because it will make the mortgage a lot easier. Remember, when looking for a mortgage, you should use a broker to find the best deal. They’ll be able to get through lender gateways that are completely closed off to you.
These are the three key stages when you need to borrow, but there might be a few more. Remember, borrowing money is not dangerous as long as you are prepared and able to pay it back.
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