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Talking About Money

At some point you may need to talk to a loan officer at your bank, a student finance advisor at your school, or Student Aid.

These are people who can help you make decisions about your money, and your higher education. It’s a good idea to go into these discussions prepared.

Making these financial discussions work for you

The more you understand and prepare, the more secure you’ll feel about making decisions on handling your money.

Prepare a list of questions before you go to the meetings so you can leave with the information you need, or at least know where to go to get the answers. Take notes and ask questions about anything you don’t understand.

Here are a few more tips to make your meeting a success:

  • Know the terminology:

Assets – things of value that you own, which could be used as security for a loan or sold for cash to pay back loans.

Amortization – paying off a loan over time in regular and equal amounts, enough to repay the full amount of the loan by its maturity date. Part of each payment goes toward the loan principal, and part goes toward interest.

Credit rating/history – an ongoing record of how much debt you have and how quickly you pay it back. Lenders will check your credit rating or history before agreeing to loan you money. If your credit rating is low (or doesn’t exist), you may need someone to co-sign to get a loan. (see “Guarantor or co-signer”).

Default – failure to make payments on a loan as described in a loan agreement.

Fixed rate of interest – an interest rate that stays the same during the whole time period of a loan.

Guarantor or co-signer – a person who promises to pay off your loan or credit card balance if you can’t make the payments.  Lenders may require a guarantor if the person applying doesn’t qualify to receive a loan on their own because they have no assets, a poor credit rating or no credit history. Note: Government-sponsored student loans do not require a guarantor or co-signer.

Interest – the amount the lender charges you for the privilege of borrowing money.

Maturity date – the date by which you must have paid back the loan in full.

Payment frequency - how often you are required to make loan payments. You can request to switch from monthly to bi-weekly, or weekly, payments in order to pay your loan off sooner, and decrease total amount of interest

Prime rate – the minimum interest rate charged by commercial banks on loans.

Principal – the amount of money you’ve borrowed (does not include interest).

Repayment terms – details including the date by which a loan is to be paid in full, the monthly payment date, the interest rate, and the monthly payment amount.

Term – the number of months or years you have to pay the loan back in full.

Variable interest rate – an interest rate that changes during the time period of a loan.

  • Listen carefully. Ask for explanations of any terms or situations that aren’t clear to you.
  • Don’t sign anything until you completely understand the details and what they mean for you.
    • Read the small print. You can take the papers home with you to go over them at your own speed, but schedule a follow-up meeting with the same person before you leave the first meeting. It’s easier to deal with someone you’ve met before if you have any further questions or need more help.
  • Shop around if you’re looking for a bank loan or line of credit. You can even get an offer from another bank, then take it back to your bank to see if they offer anything similar.

What do I ask…?

Talking about your financial needs can be stressful. Sometimes it’s hard to know how to ask for something. Here are some questions you can ask to get the conversation going.

To staff at Student Aid:

  • I was turned down for a student loan, but my situation has changed since I first applied. How do I reapply or appeal?
  • I haven’t heard whether or not I got my student loan. I applied on [date]. When I can expect to hear back?

To staff in the Registrar’s Office:

  • Where can I find out information about student aid, or scholarships, offered by your school?
  • I’m still waiting to hear whether or not my student loan has been approved. Is there any way I can defer paying my tuition until I receive my loan?
  • I’m enrolling in [name of program] and I’d like to find out if there are apprenticeships or co-operative education programs available in that area. (You can earn money if enrolled in an apprenticeship or co-operative program).

Banks may offer you a credit card to go along with your new account, promising that getting a credit card is essential to starting to build a great credit rating. It’s a better idea to put off getting a credit card until you graduate and get a job. Your credit rating will be good if you pay your bills on time and pay back your student loan when you’ve finished school.

To staff at a bank:

  • I’m looking for a basic account that doesn’t charge me fees every time I make a transaction. Do you have an account that will fit my needs? Or do you have special student accounts?
  • What online services does your bank offer?
  • What kind of fees are there for things like e-transfers?

How do I make a good impression?

Whether you have a conversation in person or over the phone, you’re going to make an impression on everyone you talk to.  Try to make sure it’s a good one - after all, you want these bankers, loan officers, and registrar’s office staff to help you.

Remember:

  • When you deal directly, honestly, and respectfully with people, they’re more likely to deal with you in the same way.
  • Everybody’s busy. Wait your turn for help.
  • Be patient. Be polite. It makes a difference.

Talking about or asking for money can be a bit uncomfortable but remember that staff at your bank, Alberta Student Aid, and post-secondary schools are there to help you make the right decisions.

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