Find out how to borrow that little bit extra with a specially designed student loan if you're studying and finding it hard to get applications accepted with regular high street providers.
Aside from government arranged loans available through local education authorities (LEAs) designed to contribute towards tuition fees, living expenses and other costs relating to studying, it can be incredibly difficult for a student to obtain a loan from a high street loan provider. This is because few students are homeowners and so ineligible for secured loans. Additionally, very few students undertake contractual employment and so do not have a sufficient level of income in place to meet the requirements of unsecured lending.
Because of the enhanced post graduation prospects of students, there are some lenders who are willing to offer unsecured loans to this group. However, these are often at elevated interest rates compared to those offered to individuals in full time employment.
The monthly repayments of a student loan are likely to depend on the amount borrowed, the term over which the loan is extended and the interest rate applied. Most student loan providers offer the facility to use a repayment calculator to work out the likely monthly repayments so you are able to decide realistically how much you can afford to borrow and repay each month. It is important to remember that aside from any optional repayment holidays (which if available, only span a couple of months), the repayments of an unsecured student loan must commence after the loan amount has been credited to your bank account.
The student loans described above provide a realistic way for students to borrow a lump sum for things such as buying a car or computer or for consolidating credit card debts. However, there is also a shorter term borrowing facility available to students. These are known as 'pay day loans' and can be useful for supplementing income for a short time.
Pay day loans provide cash advances of anything up to several hundred pounds and are designed to tide you over until you are paid or receive funds from a student loan instalment. However, these do attract particularly high rates of interest so should only be used as a very short term borrowing solution for those likely to have imminent access to funds sufficient to repay the loan completely.
As a student it can be tempting to take advantage of student loan facilities such as those described above. It is however important to remember that you should only ever consider taking out a loan if it is for a specific, necessary purpose and if you are confident that you will have the funds in place to meet the monthly repayments. Meeting repayments throughout the loan period is essential as falling behind will have a negative impact on your credit record and is likely to adversely affect your ability to borrow and access credit in the future.
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