Are Student Loans Unsecured?When I went to apply for my first mortgage the lending institution told me that I had to much unsecured debt. In all honesty I had no idea what they were referring to but then it dawned on me that they considered my student loans unsecured debt. When I called and asked the bank they said that was correct and that I would need to pay some of that debt down before I could qualify for the loan amount that I needed. Having never really realized that my student loans could have an effect on my borrowing power I decided to educate myself a bit. The reason the debt is unsecured is because it is not guaranteed by anything that the bank or lender could take away if it was unpaid. They cannot take back my education if I default on the loans. Regardless of whether I become unemployed or ill I am still responsible to pay back those loans. There was the option of refinancing the debts or consolidating them to a lower APR and getting a better payment. Having student loans unsecured was not as much a problem as my overall amount of debt combined with what I needed to borrow, Having a better payment would help my monthly debts and free up more money to pay a mortgage payment. The lender said that they could help me to refinance my student loans unsecured debt and help me to work out an installment plan that would put me in a position of affording a mortgage payment as well. Now it was time for me to really look at all of the costs involved in home ownership including taxes, insurance, upkeep, and all of the other things that even the lender does not take into account when considering a loan approval. Having the student loans unsecured debt was keeping me back a bit but those loans allowed me to get an education and find a good job. In the end they are well worth putting of some short term goals until I can get the loans paid down or off completely. |