While you often must take out a student loan for paying for your tuition and books, you still need, on occasion, to take out a loan to meet other expenses or pay for your courses. The following types of funding includes loans, such as title loans and credit card loans – either of which can come in handy if you are involved in academic studies.
1. Student Line of Credit
This type of loan permits you to borrow a limited amount of money at a time. A student line of credit is convenient, as it is a flexible loan account. You can use as much money as you need – up to a specific amount. When you use a line of credit, you normally must pay a fee. For instance, you usually need to pay an administration charge.
The interest on a line of credit typically varies. It may fluctuate continually. You will pay interest on borrowed money from the day it is withdrawn until you totally pay off the balance. Your interest will be affected by your credit score. If your credit score is good, you will pay a lower rate.
To access money from a line of credit loan, you can use an ATM, go online, or write a cheque that is part of your line of credit account. You can also use online banking to transfer cash to your chequing account. Make sure you make the minimum payment on your line of credit loan each month.
A student line of credit is specifically created for paying the costs of a post-secondary education. Therefore, it can be used to pay the costs for tuition, housing, and books. You can also get a personal line of credit to pay for items or services unrelated to your education.
2. Student Credit Card
A college campus or university is a popular venue for credit card issuers. The average US interest rate for student credit cards hovers around 18.50%. If you use this method, make sure you can pay the balance each month, as it can get expensive.
To avoid any problems, carefully review your expenses, such as housing costs, entertainment charges, and food costs. Find the right credit card for you by locating a credit card comparison tool online.
3. Private Student Loans
It’s not unusual for a student to find that their student loans don’t cover everything they need while they attend school. There is often a limit to how much federal loan programs can lend regardless of a student’s grades, credit, or financial need. Private student loans are often considered to cover the additional expenses that federal loans won’t cover.
However, note that private student loans usually require a certain credit score, co-signers, additional fees, and most importantly they have variable interest rates which means your payment may go up depending on interest rate fluctuations. Unlike federal loans, private loans may not cut you any slack during financial hardships. The government only recommends private loans after you’ve already tried federal loans, grands, scholarships, and work-study funds.
4. Title Loans
Title loans can also be used to support your financial needs when you are a college or technical student. This loan option is helpful if you have a lower credit score and own a vehicle. The loan is collateralized. In other words, you use the loan as collateral to pay the loan back. If you default on the funding, the lender has the right to the title of your vehicle. This funding option is normally used for a financial emergency.
Student loan stock photo by ITTIGallery/Shutterstock
