Education plays a great role in people’s lives and especially university education. Because of that many families consider the option to take personal loans for college students. Whether it is a beneficial decision or not you will find out in this article.
Introduction into college loans
It was calculated that the average cost of college studies is about 35 thousand dollars. The sum is dramatic and it has to be covered somehow. Of course, no one canceled different grants and scholarships but there are some situations in life when nothing except the loan is appropriate. The good thing about that loan is that accommodation, food, study materials and much more are included in the study process that is why they are one of the most advantageous loans on the market. After college, you will easily find yourself a well-paid job and cover the loan in no time.
Still, the personal credit interest rate is low and equals about 10 % annually. This is one of the most beneficial interest rate possible. Also, the loan period is high enough – from 2 to 5 years, which makes it more affordable to make monthly payments.
How to apply for a college loan?
The main requirement is that you have to attend college for half a year, another stumbling block can be the fact that you will need to have at least average credit rating or proof of a stable income. Otherwise, you will probably need to hire a guarantor. Remember that the best way to start your credit history is to get a credit card and start to cover all the payments in time.
Distinctive features of personal loans for college students
This type of loan doesn’t require collateral in most cases. For one thing, it is a plus because you don’t need to risk anything. However, the interest rate on this loan will be higher than average. Usually, it is the collateral that helps to bargain the better loan conditions because the organization that issues the loan is sure that it will anyway receive the equivalent of money borrowed back.
Another interesting perk is a fixed interest rate. It is a very controversial feature. On the one hand, all the payments will reveal the same for the entire period of the loan including monthly payments. On the other hand interest rate in loans which don’t have a fixed interest rate is getting lower and lower with every month. So it is hard to say that you should definitely get this feature if you are getting offered. It all depends on your conditions and circumstances.
If it is hard for you to decide whether to take a college loan or not you need to be sure that you will be studying hard and money you loaned won’t be wasted. Also, be sure to get a part job to start repayments while you are studying. Ask for financial support from your ancestors. And finally before applying for the loan be sure to try to receive a grant or a scholarship which is way more profitable for you as a student. Remember to keep your credit rating on a high level and consult with your parents first about personal loans for college students