When you are a student at college or university, managing money can be hard. You have books and study materials to pay out for, as well as living costs and rent to cover. If you are new to managing your finances, it can be a difficult transition.
A lot of students consider getting a personal loan to help them through their studies. This may be an option for you if you would benefit from some extra cash. Let’s take a closer look at short term loans for students and how they might benefit your situation.
Can Students Get Personal Loans?
It was once thought that students could not enjoy short-term loans. They were seen as unreliable and not having a regular source of income. There are a lot of people that still believe that student loans do not exist. However, this is untrue. It is possible for a student to enjoy a short term loan for unexpected and emergency situations just like anyone else. Lenders have changed their minds and offer options for students and this can include loans for up to 36 months.
Criteria for Short Term Loans
Just as the name suggests short term loans for students are going to offer you extra cash with repayments spread out over a short period of time. If you are at university, you can use this money any way you need to. For example, you can use a short term loan on tuition, travel expenses or course necessities.
There are some basic requirements for gaining loans short term. This includes:
- Having a bank account in your name
- Being over the age of 18
- Being a citizen in the United Kingdom
- Being in employment
- Having a source of income
If you are able to clarify all of this information, you can complete an application for short-term loans up to 36 months. Companies may inquire for further information in their application.
Benefits of Short Term Loans
There are many advantages to choose a short student loan. Often, the lesser time you have to repay a loan, the better. You can quickly make repayments and it is like you never had a loan to deal with. Students can have a lot of expenses and the last thing you want is to get into a lot of debt. Short term loans are a good way to deal with expenses without them becoming too much of a burden.
In addition, this option has a reasonable interest rate for students. You often find that a payday loan has a high interest rate attached. This can make repayments unmanageable. Thus, short term loans can be a more affordable option for some students who do not have a lot of savings or a big income.
Your Credit Score
Students worry about their credit rating when it comes to loans. While it can be more difficult to enjoy a loan for student if you have a bad credit score, you will not automatically be disqualified. Of course, lenders are going to have different requirements. But they are more likely to also look into your overall financial situation and not just your bad credit history.
For example, lenders may find out if you have a source of income or job before offering a student loan. This can provide them with some security when it comes to repayments. They want to know that you can afford to pay them back and you are not a risk to do business with.
Ways to Improve Your Credit Rating
By paying back any loans you have on time and in full, you can improve your credit score. In addition, you can register and make sure your details are on the electoral register. These simple tasks can boost your score and allow it to look attractive to lenders for your student loan application. Make sure that you space out any applications for a student loan. Applying all at once will be noted on your credit history and other companies will see this when they are checking your finance habits.
What Other Loans Can I Get as a Student?
It is always best for students to explore their options when it comes to loans. There are a lot of different types of loans out there and some will be better suited for your financial situation than others. This includes shopping around different lenders to find the best deal.
Payday Loan
Another option for students is payday loans. This is a short-term way to access extra money before your next paycheque. The idea is that you have a job and this extra cash can give you a boost before you are paid. You simply pay lenders when your paycheque comes in.
Other Options for Borrowing Money
There are some other offers that will be open to you as a student that you can take advantage of. The most important thing is to choose an option that you can always afford.
Overdraft
For example, some banks offer 0% overdrafts. This means that you can spend over the amount of money that you have in your bank account without having to pay any interest. Overdrafts can be small or substantial amounts depending on the arrangement You have with your bank. It is worth enquiring about whether they have a special student account that offers you benefits while you are at college or university.
Credit Card
Another option you can explore is applying for a student credit card. This is going to let you spend a certain amount each month and make repayments the next month. There are some credit card companies out there that offer you 0% because you are a student. This means that you only have to may payments for the items you buy and not have to pay any interest. This may help you budget each month while you are studying. Just make sure that you always know how much you are spending and not to buy anything you cannot afford.