How do student loans work?

Student studying on laptop in libraryLet’s face it. Not everyone has the luxury of having their education paid for. And you know what? That’s ok! That’s why student loans are an option.

Post-secondary education can prove to be very expensive. Understanding how student loans work and how you can minimize your debt after graduation is important to help alleviate some of the worry that comes with borrowing.

Let’s start with the basics.
What’s a student loan?

Student loans are designed to help you pay for your education and help full-time or part-time students with expenses associated with post-secondary education. Student loans are offered through credit unions, banks and the government. Find out more about where you should get your student loan and if your program qualifies.  

It can be hard to know exactly how much you’ll need.

Your financial institution will work closely with you to determine how much you require to pay for your tuition, textbooks, rent and any other expenses that may come up. Check out these great Money Saving Tips!

You’ll also want to ensure you have some spending cash.

We understand that this is a time to have fun and we recommend that, but keep in mind that you’ll need to pay back your loan and the money does run out. Your financial institution will work with you to create a budget so you can still have fun without going into too much debt. Check out our list of calculators to keep yourself in a healthy financial spot.

Making payments while you’re in school.

With a private student loan, like the one offered at Affinity, the student is responsible for making interest-only payments while is school. This can be set up on whatever payment schedule works for you and you have the option to make lump sum payments any time without penalty. This is different than a government student loan, which doesn’t accumulate interest or require you to make payments while in school. 

Congrats, you graduated! Now what?

I'm ready to talk. Book an appointment.Grace periods fluctuate depending on your financial institution. What’s a grace period, you ask? It’s a period of time between completing your education and when you’re required to repay your student loan. Because we know you might be looking for your ideal job, we want to help you make that as easy as possible by allowing you to continue making interest-only payments during this time. Learn about some great ways to pay that debit down quickly!

Check to see what your grace period is so you can be mindful of when you’ll need to start paying your student loan back. For information on Affinity’s grace period, check out our Education Loans webpage. Keep in mind you may want to buy a car or a home and even have children someday so the faster you can pay down your student loan, the better.

If you have more questions about student loans, the advisors at our Contact Centre would be happy to help you out! Give them a call at 1.866.863.6237.