Student Loan Basics You Need to Know

If you have a student loan, there are 2 main things you need to know about it:

 

1. Principal Amount

This is the amount you borrowed for your education, your car, your home, etc. This number will (hopefully!) be decreased by the payments you make on it and will increase due to…

 

2. Interest

This is how you’re charged for the money you’ve borrowed. In other words, interest is a fee paid for the use of another party’s money. You borrowed their money to pay for your education, and now you’re being charged accordingly.

Interest is likely being added to your principal daily, monthly or annually and can easily increase your principal by an astronomical amount.

If you don’t know your principal amount, you don’t know how much you owe. And if you don’t know your interest rate, you don’t know the rate at which you’re being charged for borrowing all that money.

If you have a student loan but don’t know your principal and your interest rate, you should really look into that soon. Paying off your student loans quickly and effectively will be tough if you don’t know much about them.

 

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About Taylor

A few years after graduating college, Taylor made it her mission to become debt free. After paying off all $60k of debt, she began to blog about what she's really passionate about: personal development. Nowadays, Taylor blogs about the topics of Mindset, Money, Health, and Career for women. Read more about Taylor here.

"It's Per$onal" is a super popular and anonymous blog series about the personal lives and finances of women all over the world. Check it out!

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