Here's a great tip I got from an investment banker once:
If you're a student, take out as much of a student loan as possible. Leverage yourself to the hilt!
Reminder, this is not a bank loan or a mortgage loan or some kind of equity loan or secured loan!!! This is a student loan. From the Government of Canada (I'm sure the US has their student loan system too). Why the loan, you ask? Well two reasons.
1) Student loans have ZERO INTEREST until you graduate. And even then you get very very low interest rates. What you can do is pull out the loan, stick it in a 4 year GIC with high interest rates. By the time you pay back the 50 grand or so you own, you'll be several thousand richer... no joke!
2) College loan consolidation. Let me say it again, college loan consolidation. It might also take on the name of "student debt consolidation" or "educational loan consolidation" or "personal student loan consolidation". You guys get the picture. Basically, college loan consolidation allows you to combine your student loans into one master loan, which significantly reduces the monthly payments you have to make. In some instances, by over 50%! If you want the mechanics, you'll have to look online. But paying a fraction of a percentage point for my loan is a pretty sweet deal.
Just one caveat, be careful about how you spend it! I would advocate sticking it in a GIC. It's safe, you get high returns, etc etc. Do NOT go on a flippin spending spree because that is not free money. Seriously. You need to pay it back eventually.
Students, check it out for yourself. Might as well exploit the government funding because sooner or later you'll be paying it back in taxes!
My student loans actually went to paying for my classes, I got as much as I could and paid for the rest out of pocket.
ReplyDeleteThat said, consolidation is a great idea, you can easily knock a $100 off your monthly payments. Also, they are pretty generous with deferments until you get into a situation where you are able to repay the loans.
you know i had thought about this once but i figured it had to be illegal. i may have to do this instead of just declining the extra available...
ReplyDeletegood advice. you'll probably get some hits from the googles. :D
ReplyDeleteDefinitely good information.
ReplyDeleteha... I wish I was in another country. our student loan is 1% interest I think. Should get it. its not for everyone though. Sad.
ReplyDeleteagain very good tip!
ReplyDeleteActually good insight, I'll look into this :]
ReplyDeleteGreat info!
ReplyDeleteWow i'm surprised more people don't do this
ReplyDeletenice advice
ReplyDeleteheh, shopping spree is the worst you could do with the loan.
ReplyDeleteI have a terrible feeling I'd waste mine...
ReplyDeleteMy loan goes to paying for my classes, ha. Maybe I should try a more expensive school.
ReplyDeletethey raped my ass this year
ReplyDeleteinteresting. thanks for sharing :)
ReplyDeletegood read.
ReplyDeleteGood stuff, I'm trying to pay as I go but obviously it isn't easy unless you win the lottery!
ReplyDeleteim actually looking to get a loan for next year so this information is great!
ReplyDeleteStudents don't have such good offers in my country
ReplyDeleteInteresting. Point 1: then tere comes inflation and boom you have lost your thousands of dollars
ReplyDeleteas a college student, i find this more than useful! :)
ReplyDeleteThanks for the tip, this may really come in handy.
ReplyDeletewise banker, he's got a point
ReplyDeleteI have these out the butt.
ReplyDeleteYeah, it's quite good that you have that in Canada, but here in Baltics we do not have anything like that, I'm quite jealous.
ReplyDeleteSeems a bit risky, no?
ReplyDeleteI've already got my student loans in good use.
ReplyDeleteDAMN, too bad im not in school anymore
ReplyDeleteI got a fullride scholarship. Loans really arent worth it. You usually get fucked over in the long run.
ReplyDeleteGod they suck.
ReplyDeletePlease stop including your blog URL when you comment.
ReplyDeleteThanks! I hope we have student loans here in the Philippines. Haha. Third world sux big time.
ReplyDeletegood advice... yet it can be a little bit risky.
ReplyDeletejokes on you, i dont have to take out loans for school
ReplyDeleteI think I know someone who might want to read this lol
ReplyDeleteeven do this advices don't apply to much to my country, they're useful, cause they give me ideas, so keep it :D
ReplyDeleteThis is interesting and i'll look into it.
ReplyDeleteThat might work in Canada, but here in the States, student loans are scary business.
ReplyDeleteI hear only the IRS is more vigilant in the pursuit of 'their' money.
I think those tips only apply to Canada...
ReplyDeleteVery good advice.
ReplyDeleteMy loans pay for food and entertainment almost exclusively. I get tons of financial aid for being an independent. Btw i reciprocate $upport. :)
ReplyDeleteoh wow, very interesting perspective. I was skeptical at first )
ReplyDeleteI took my student loans and tripled the money... it really works.
ReplyDeletecould use financial aid and government grants first. those you don't have to pay back :)
ReplyDeleteDisability pension is the way to go.. just kidding!
ReplyDeleteYou posted too check you out but I already follow you <3
This is actually quite relevant advice for me, as I'm graduating soon. I've never thought of putting the loan money into a GIC. and I definitely will have to try and consolidate all of my loans. Good tips!
ReplyDeleteto bad it was almost free in belgium. payed 100 euro, 50 for books. thats all :P
ReplyDeleteI have this in France, but it's banks which are doing it.
ReplyDeleteThats interesting because I thought you should take as little as possible..
ReplyDelete