7 Myths About Your Student Loans

American Investment Planners LLC

500 North Broadway, Suite 260, Jericho, NY 11753

(516) 932-5130 / (866) 932-5130

Pay this loan first, pay that loan last, and don't worry about XYZ - what have you been told about your student loans through word of mouth that seems pretty believable? While a lot of what you've been told by reputable sources such as your college's financial aid office is likely true, between the internet and what your friends say, we bet you've probably heard a lot of things regarding your student loans that aren't true.

Since student loan debt isn't something you want to mess with, we're debunking 7 myths that might be sending you down the wrong path.

Myth #1: Student loans don't matter while you're in school.
Completely false! Although you aren't necessarily paying them back at the time, you need to be thinking about how you'll pay them back in the future. For example, some students might choose to get a part-time job so that they can save for their first few payments. Additionally, you should also be researching ways that you can minimize how much debt you take on each year, whether that be through scholarships or other forms of financial aid that you may be eligible for.

Myth #2: There is no one to help with student loans.
Truth is, there are plenty of resources you can use to help you with your student loans! One of the most valuable will be the lender - as they are the ones who lent you the money, they will likely have some of the best insight and answers to any questions or concerns you have. Next, there's your college - your financial aid office can be a great resource, especially while you're still in school and have questions about the loans you're taking out. Last but not least, there are professional financial advisors who have been trained in topics like this so that they can help you better understand your loans as well as create a strategy to pay them back.

Myth #3: You have to pay what the lender says each month.
While yes, you'll need to meet the minimum payment, that doesn't mean you can't work with your loan provider to reduce that payment or pay more than is required. Many lenders offer different repayment programs that can be adjusted based on how much you can afford, and in most cases, you can certainly pay a little extra to reduce how long it takes for your debts to be fully paid off. 

Myth #4: Declaring bankruptcy will get rid of your student loans for good.
Even if you declare bankruptcy, you'll still need to pay back your student loans eventually (with very, very few exceptions as a result of undue financial hardship). You don't want to declare bankruptcy if you don't have to anyway, since it could negatively impact your credit.

Myth #5: Extending the repayment period will make your loans cost less.
On a month to month basis, maybe yes as your minimum payment will likely go down. However, by taking on a longer repayment period, you subject yourself to more interest, which ultimately causes your loans to cost you more.

Myth #6: You should always consolidate your loans.
Student loan consolidation may make sense if it's going to lower your interest rate, but it isn't the right approach for everyone. Unless you read the fine print and know for sure, consolidating may actually wind up costing you more, especially if the interest rate is higher than what your current loan provider applies.

Myth #7: It's going to take forever to pay back your loans in full.
It may feel this way when you first see your account balance, but between the various repayment plans and help you can receive from your loan provider, you will be able to pay back your loans in a timeframe that works for you. The goal here is to be confident in your ability to pay back your debt - when you get into the right mindset, anything is possible.

Here at American Investment Planners LLC, we know that facing student loan debt can be hard to do, but we also know that with the right advice and guidance, it won't be so bad! If you have questions or concerns about your loans, contact us at (516) 932-5130 or email info@americaninvestmentplanners.com to set up an appointment with one of our advisors today.