Loans

This post is a bit of a rant on loans. They suck! They are the worst.

I had to take out loans to go to college. I was lucky though because my parents help me pay for most of it. But I still had to take out some loans, and now that I'm out of college I get to pay them back. Even though my total principle was low compared to most, it is still a lot. The loans were all subsidised by the government, so the interest rate is low. Still though, paying it back is tough.

I am required to pay back $150.00 dollars a month, as this is what is defined in my payment plan. This is really not to high, but if I follow it, it will take me years to pay everything back.

Each month I make a payment, and the interest is payed first, then whatever is left goes to reducing the principle. On average, each month I pay $40.00 to pay back the interest. So the rest about $110.00 goes to the actual loan. That means if I did that for a year, I would pay $480.00 to interest and $1320.00 to loans. Lets say it took me 10 years to repay the entire loan, which would amount to a loan of $13,200.00. Thats almost $5,000.00 lost to pay only a $13,200.00 loan. Although interest would decrease as the loan got payed back, it is still ridiculously high. For a lot of college graduates who owe close to $100,000.00, you can do the math to calculate how much money they will lose.

I feel it is bizare that you go to college to become smarter at things like this, yet it is the norm to take out ridiculous loans and live an extravagant student lifestyle paid for by loans. And the schools do not try to educate you to be smart with the money you borrow. They give loans out as if it is free money. You don't realize the value of what you borrowed until you start comparing your payments to your salary when you finish school.

The saying "a penny saved is a penny earned" could be switched around and applied to college loans. "A penny spent in college is a penny that has to be earned 4 years later."