When to Consider Student Loans?
Besides educational loans that allow students to pay for their education and cover other expenses related to obtaining your college degree, there are also personal loans for students. These loans allow you to get the amount you need to beat your money problems or cover your personal needs and wishes. 15M Finance decided to make their own list of pros and cons of getting a loan for students and tips for student borrowers.
Pros and Cons of Personal Loans for Students
There are the following advantages of loans for students:
- It can be used for any purpose. There are no limits or restrictions on how you can spend the money you get. Whatever your goals are, personal loans can help you reach them;
- Relatively low interests. The minimum APR is usually as low as 3.99%, which makes personal loans affordable;
- Easy-to-meet requirements. As students typically have no stable source of income and credit score, personal loans for students are usually very tolerant. You may be allowed to have a co-signer or apply for a loan with no minimum credit score or income requirements;
- Flexible loan terms. There are different types of loans for students that allow you to choose the option that meets your current situation. It may be a small dollar loan with a repayment period of about 30 days or a long-term personal solution with a term up to 5 years.
However, there are also some cons you should be informed about before obtaining a loan:
- High maximum APR. As students generally have no credit score and just building their credit, lenders may offer you higher rates. In some cases, they may reach up to 521% APR for some short-term solutions;
- Potential origination fees. Some lenders may set additional charges and fees that can reach 8% of your loan amount.
Summing up, loans for students may be a good financial solution if you choose the right product and make sure you will be able to repay the money without financial stress. It is better to consider some small loans with limited repayment periods if you don’t have a stable part-time job.
Don't use loans for unnecessary spending or maintaining an expensive lifestyle. It is easy to bury yourself in debt by living on a loan.
Tips for Student Borrowers
Here are some tips for your good lending experience:
Life is short, and your student life is one of its best phases. You can afford more if you make an informed decision and sensibly assess your capabilities before getting a loan.
- Consider a student credit card. Credit cards for students are good for building credit. They also allow you to have some additional money on hand to cover unexpected expenses or buy some necessary stuff. Student cards tend to have better terms than other credit cards;
- Keep track of your financial burden. Although there are some expenses that are unavoidable, taking on too much debt while being a student makes it difficult to get ahead;
- Get a part-time job. A part-time job can add a nice cash flow and help you manage without getting a loan. It is also a good way to learn how to manage your finances, and it will definitely help you in the future;
- Monitor your credit. Your credit score is very important, so you should check it on a regular basis and make everything possible to maintain it in a good range. Signing up for a credit monitoring service may be a good idea.