"When I graduate from college I'm gonna be R-I-C-H! Expensive cars, homes... you name it, it'll be MINE!" Who hasn't thought or said something similar? In college, everyone says they're going to be rich, but very few know how they're going to make it happen. But we all want instant gratification. Who really wants to wait till after college to make money? I want money NOW, so why not get money fast from a private student loan?
There are college students who've taken out multiple student loans to pay for $100 steak and lobster dinners, evenings out in the club, and even summer trips to Hawaii. And how would I know? I've actually met some of those people! Unfortunately, when you live in the moment, in the spirit of things, you forget that everything has a consequence...
When someone takes out a loan, the lender expects them to pay it back with interest. The lender doesn't care that you have a kid, a mortgage, or a hungry stomach; you better pay them back or else. If you miss a payment and default on your loan, the interest rate will skyrocket! If you thought 8% interest was high, once you miss a payment you'll be paying 18% interest or more!
And you haven't even heard the worst of it! Private lenders can and probably will increase your interest rate even if you pay on time. If you think filling for bankruptcy will erase your debt, you're out of luck. You are still responsible for student loan debt even after you file for bankruptcy! Once you get a student loan, you're stuck with it forever! So please don't blow your future and sign up for excessive loans.