A student loan is a lump sum of money that a student receives from the federal government, their state government, or a private company, which they can use toward tuition or other school expenses.
What is a student loan?
While the term “student loan” is most commonly used for government-backed student loans, it can also refer to personal loans or other forms of credit where students meet requirements.
Best Loan Companies for Students in the United Kingdom
Representative example: Borrowing £10,000.00 over 5 years at 12.6% per annum. (repair) with an application fee of £0.00. Representative 12.9% of the APR and the total payment of the loan totaled £13,405.20 to £223.42.
Oplo homenowary unmant loan
A representative example is £10,000.00 edging over 5 years at 31.3% per annum. (Permanent). Representative 31.3% of APR and total debt of £18,516.00 in total payments of £308.60.
Novuna Personal Loan
Representative example: Borrowing £10,000.00 over 5 years at a 3.6% per annum. (Permanent). The April representative is 3.6% and £10,926.00 in monthly payments of the total loan of £182.10.
Lloyds Bank Existing Customer Personal Loan
Representative example: Borrowing £10,000.00 over 5 years at a 4.9% per annum. (Permanent). Representative of the APR 4.9% and in payment of a total loan of £11,265.60 to £187.76.
Zopa Personal Loan
Representative example: Borrowing £10,000.00 over 5 years at 15.4% per annum. (Permanent). Representative 15.4% of the APR and total payments of £14,088.00 to £234.80 of the total loan.
Types of loans for students
If you are a student, there is a possibility that you are used to working with a low budget despite working part-time. This means that if there are unforeseen costs during your study, your bank account balance may seem a bit dire. When you find yourself short of money, one option is to borrow money from friends or family to avoid paying interest. But if the bank’s mum and dad are closed, and you still need the money, you can consider the following options.
Private student loans
Loans are made at private student lenders or loan providers and are not offered through the government. They are usually unsecured personal loans, allowing you to borrow an agreed amount and then pay for it over a fixed period, usually 1-7 years. Private student loans can cover school fees, student costs, and other costs, such as housing, food, and other living costs.
Student credit cards
While most credit cards will fall out of bounds for most students due to their limited credit history and low income, Target cards are easy to get approved. Expect different interest rates on cards on the market, with some offering 0% interest for purchases for a certain period before increasing tariffs later.
Students, the best strategy with a credit card is to use it and pay off your balance as soon as possible – do this every month, and you shouldn’t be subject to interest, even if it’s not a 0% card. Don’t use it to withdraw cash, as that way; you’ll start paying interest and collecting fees right away.
Credit Builder Card
Designed as a “stepping stone” product for borrowers with a poor or limited credit history, this credit card does not come with an introductory period and typically carries a higher interest rate. However, as the name suggests, these cards can help build your credit ranking, making you more likely to get approved for credit cards or other personal loans.
Get a Personal Loan as a Student
It is heartwarming to take traditional personal loans as a student. Some lenders will not consider student applications, and those that do, want you to have a strong credit ranking. The lender wants to make sure you can pay off your loan, which can be difficult to prove if you don’t have a real credit history or a steady source of income. More importantly, if you are approved for a personal loan, you must make sure you can pay off the loan.
With a guarantor loan, promise to step in if you fail to meet the payment, friends, or relative promise. This loan was offered by specialist lenders and usually comes with a higher interest rate. Then, you should be able to demonstrate that you can afford your payment.
Short-term student loans
Payday and high-level installment loans can be relatively easy to get approved for, but higher tear levels are linked to 0.8% per day. For example, they should only be considered as the final solution. Some lenders, such as Smart-Pig, target students specifically, focusing on your next student loan installments rather than your next payday.
What is the cheapest student loan?
This will depend on your situation and the type of loan you have. Government student loans have standard interest rates, but they vary depending on where you study and can also be changed with retrospectives. Personal credit offers different rates depending on lenders and things like the size and duration of your loan and your credit history. You can compare student personal loans here.
What are the best loans for students?
Like any loan, the best student loans will be the ones that offer the most competitive interest rates and payment terms. While government students may offer profitable payment terms, this loan is not available to everyone. You may be able to secure student loans at lower rates elsewhere.
Will I be eligible for a student loan?
All lenders will retain applicants through Credit Reference Agents (CRAs) and internal strength and risk assessment. As a student, you may have a very limited credit history – especially if you have been straight out of school to higher education and/or have a low income.
Your situation may be considered more diverse (and therefore riskier) to lenders, and it may be difficult for you to access traditional loans. However, the good news is that many of the options above are designed specifically for people in your situation.
Always check the feasibility criteria for the specific products you consider before applying – and multiple applications for credit in a short amount of time can be a waste of time and hurt your credit score. Most lenders now offer “soft search” facilities, where borrowers can check their chances of getting approved for a loan or credit card before applying for completed applications without affecting their credit record.