The cost of attending school extends beyond books, dorm space, and tuition. Rent, electricity, food and more are just some of the expenses you may incur if you live off-campus.
The Australian Taxation Office (ATO) reported that for 2019-2020, Higher Education Loan Program (HELP, previously HECS) had updated loans granted to roughly $66.4 billion.
However, many students discover that they still don't have enough money to afford their educational expenses, even with student loans. If you've tried everything else and are still in this situation, a personal loan for students is an alternative available.
"Personal loans can help you improve your financial situation if you fully understand the payback responsibilities, interest rates, and associated fees, and only borrow what you can afford. These loans are popular among students who are momentarily unable to make a sufficient or steady income to cover their costs due to their studies," says financial analyst and bad credit business lender, Shane Perry of Max Funding.
Do you want to know what personal loans are available for you as a student? Read on our list below.
It is simple to apply for a credit card. Keeping track of your payments, on the other hand, isn't always easy. Several student credit cards are available, many of which provide reasonable interest rates and benefits.
While it may be tempting to use one of the nicest credit cards for daily spending, if you don't pay your account off each month, it may quickly become problematic. If you have the self-discipline to use your credit card only for expenses you can afford to make in cash and then pay off your balance in full each month; your credit score will rise rapidly, allowing you to qualify for higher credit offers.
Secured Personal Loan
A secured personal loan is guaranteed by something you own, such as a vehicle. If you cannot pay back the loan, the lender will use this asset as collateral.
Nonetheless, secured loans often feature lower interest rates since you have an asset as collateral for the loan, and you can avail higher loan amount than with an unsecured loan. However, if you default on the loan, you risk having your secured asset seized.
Unsecured Personal Loan
There is no collateral associated with an unsecured personal loan. Conversely, the lender will look at your earnings, assets, and spending to see whether you can pay the loan. Due to the absence of loan collateral, interest rates for unsecured personal loans are often higher than those on secured loans since the risk to the lender is considerable.
Additionally, you cannot often borrow as much with an unsecured personal loan, but this varies with every lender.
Private Student Loans
Private student loans are another lending alternative for students. It's essential to keep in mind that although private personal student loans offered by banks, credit unions, and other financial institutions are more expensive than government student loans in terms of interest and privileges, they are somewhat comparable.
Some private lenders provide interest-only payments or complete deferral while borrowers are enrolled in school, and many offer rate reductions for automated payments or excellent grade point averages.
Graduation Is Possible With The Help Of Personal Loans
If you're a student, you're probably on a limited budget, so you should carefully consider the benefits and drawbacks of obtaining a personal loan before deciding if it's suitable for you. If you are unsure about your capacity to pay back the loan, believe you might receive a better deal with another source of finance, or assume you will be taking on extra debt, you should reconsider.
However, if you decide that a personal loan is best for you, compare loans thoroughly by checking interest rates and fees, payback amounts and flexibility, eligibility requirements, and how much you may borrow.