How Student Loans Affect You

Whether your high school graduation is just around the corner or you already have a year or two of dorm life under your belt, you may be concerned about student loan debt. It is widely known that many college students end up borrowing money to help pay for their education expenses. You may also wonder if that debt will affect you negatively after completing college.

Here are some considerations to keep in mind as you apply for student loans:

• Minimize the amount of loans you take on. Student loans are meant to help finance your education, including tuition, school books and transportation. They are not meant to buy pizzas or fund entertainment. You can help control how much you may need to borrow by applying for financial aid, working summers and part time, and living as frugally as you can.
• Pay down your debt consistently. Student loan payments typically start six to nine months after graduation. By making regular payments — on time each month — you will be building a positive credit history that can help you qualify for additional credit to reach other financial goals.
• Consider future debt needs. Buying a home for yourself may seem light-years away and you may even think it will be hard to get a mortgage while still carrying student loan debt. However, the opposite may be true — especially for people who make regular student loan payments on time. Because lenders view student loans as positive credit history, if you have not missed any payments, having a student loan shouldn’t hurt you. Lenders will also look at your debt-to-income ratio, the percentage of money you earn that can go toward debt payments.

Horizon Bank is here to help

How you manage your credit history now can affect your finances for years to come. At Horizon Bank, we have the financial loan products — student loans, auto loans, credit cards and mortgages — to help you establish valuable credit to achieve your goals. We also have the knowledge and experience to share equally important money management skills with you. Just visit a local branch near you or visit us online at www.HorizonBank.com learn how we can help.