The number of student loans is growing year after year exponentially. If the trend does not decline, in 25 years the amount of student loans issued will outdose the mortgage. According to some data, since 2006, the number of education loans has tripled. So, for example, in America by 2010, the debt on these loans exceeded the total credit card debt.
Over the past 10 years, every year the demand for student loans
Grown by 10%, and the mortgage each year was taken mostly by 0.6%. At this rate of growth, the education loan will overtake the mortgage by 2042. It should be understood that the forecasts are based on recent data, but do not take into account government programs and the size of subsidies that may be introduced in the near future.
The level of overdue student loans is catching up with consumer loans and fast loans that are issued in stores. It is difficult to compare such different loans as a mortgage and student loan and it seems that it is unlikely that anyone can catch up with the mortgage, but there are a number of difficult moments for loans for studies. These loans are more difficult to manage, if, suddenly, your finances are in a difficult situation, in addition, they are less protected than the same mortgage.
Student loans are not so heavily regulated by the Bank of Russia and the state, perhaps that is why the increase in overdue loans for these loans is constantly growing. While the mortgage arrears are constantly decreasing.
Most mortgage loans are designed for a 20 year or more period. They are very fond of banks, and thanks to government programs, they give out these loans more willingly, knowing that their risks are reduced. This increases competition among lenders, and therefore makes the mortgage more affordable. Prices for student loans vary somewhat, and the actions of lenders in the event of a delay in the borrower are not explicitly described.
Why do banks not like to issue student loans?
Mortgage loans are good for the bank so that it can accurately determine its risks by issuing this loan. If the borrower can not cope with their financial responsibilities, the bank sells real estate and returns its assets. And in the case of a student loan, the bank will assume all expenses. At the same time, the credit history in the case of non-payment of the mortgage, probably deteriorate forever. At the same time with loans for training, the entry in the CI can be corrected for several years.
Another potential problem with student loans is the potential for bankruptcy. If a borrower declares himself bankrupt in a mortgage, his debts are likely to be written off by selling the property or part of it. And in the case of a loan for education, there may be nothing to cover debts. As a result, the procedure can take a long time, which will negatively affect both the borrower and the lender.
Are you worried about a possible delay?
Here are 3 basic tips for not being in a difficult financial situation.
- Do not take more than necessary. To stay away from financial difficulties, one cannot resist the temptation to buy something not at all necessary. It is necessary to calculate exactly how much finance will be needed to achieve the set goal, before taking a loan.
- Consider other options. Explore all types of credit available to you. Perhaps you will find a slightly different product and will be more profitable over time. Even a credit card can be useful if you have the opportunity to repay the loan before the grace period ends.
- Consider the possibility of refinancing. If you still find yourself in a situation where it is no longer possible to cope with their financial responsibilities, you can change the terms of the loan in the same or another bank. The amount of debt, of course, will not change, but you can pick up more suitable individual conditions.