There is no doubt that the costs of attending college have increased in the past decade. Where circumstances allow, personal loans for students with no income or credit history have become a popular choice to offset the cost of books, dining, off-campus housing, and even day-to-day living expenses.
With the total for tuition, fees, and room and board at four-year colleges now averaging $26,593 per year, students need to weigh all their options for funding an education before going to college. Personal savings, varying types of aid, scholarships and grants, along with Federal student loans should all be carefully reviewed as part of every student’s college plan. However, even with all these options available to students, many are still confronted with a sizable amount of financial need. The fact is, students can easily hit their financial limits on the most affordable federal student loans, leaving a gap between the total financial aid received and the total amount of funds needed to fully pay for college.
A personal loan for students can supply a source of funding to fill the financial gap. The loan provides the necessary funds to assist students in pursuit of their college education. They can be beneficial for those students with or without a job or even those with poor to no credit at all. Personal loans can help students meet their outstanding tuition costs, as well as provide funds for various additional expenses such as room and board, computers, books and related college necessities.
Personal loans are consumer loans granted to individuals for personal reasons, such as paying a medical bill or providing a source of discretionary funds if you are a student. Though they are often compared to credit cards, they come with their own qualification requirements and their own terms of repayment. There are several kinds of personal loans. They can either be unsecured or secured by an asset such as a car, or by a guarantor, i.e., a co-signor. Whatever the type of personal loan, repayment terms are usually through a fixed amount of installments paid each month over a fixed period of time, e.g. 12 to 60 months.
If you have no income and either no credit or bad credit, you’ll most likely need a co-signer to get a private student loan. Your co-signer will need to have a steady income as well as good to excellent credit scores, typically at least in the high 600s. Signing with a co-signer means they’re on the hook for your loan bill if you can’t pay.
Some lenders offer loans exclusively for student borrowers that don’t take credit into consideration. Instead, these lenders look at the school you’re attending as well as your income and career potential to determine the amount you can borrow and at what rate.
In any event, there are many circumstances that make getting a personal loan for college necessary. Textbooks and supplies like backpacks, notebooks, pens and so on, can cost anywhere from $1,200 to $1,500 depending on the number of courses you are taking. You may need to purchase additional equipment such as a laptop and a printer. Whether you live on campus or off, you may need unexpected household items such as towels, sheets, a desk or a phone. No student should underestimate the cost of clothing, groceries, laundry, cosmetics or any toiletries. Most college campuses require health insurance to cover health care and medications. School activity fees and lab fees cover extra charges from tuition and room and board. These fees include parking stickers, extracurricular activities, gym access, cable TV and college sporting events.
Going to college can be a rewarding experience and lay the groundwork for a good paying job. However, it is costly. With the rising cost of attending college, the need for students to secure a personal loan is growing. If you are a student considering a personal loan, know what is needed to borrow by creating a realistic list of expenses. In this way, you will only borrow to pay for essentials and avoid taking on excessive debt.