Should Students Take Out Personal Loans?

Loans are a common part of the college experience. Reports show that 69% of university students that graduated in 2019 have taken out student loans to help them pay for school. 

But student loans are not the only option to help you meet your financial needs during your time at school. There is actually a significant number of advantages to utilizing personal loans as a student. Here are 4 reasons why you should apply for a personal loan while pursuing your degree:

1. Fast Processing

Sudden expenses are no stranger to college students. Schools increase their tuition at exponential rates and extra fees are added on constantly, not to mention personal emergency expenses such as car repairs or healthcare. Personal loans can be processed quickly, with some lenders taking between 1-7 days to approve the loan and get the money into your account. This makes it much easier to keep up with the financial demands of college life. 

2. More Qualification

If you end up needing to refinance your student loans, there are often graduation requirements that may hinder you from being able to do. Not finishing school can be detrimental to your student loan debt, and only a handful of lenders provide the option to refinance without a completed degree. However, if you take a personal loan, you won’t need to worry about your degree status to take out the money you need. 

3. Meeting Expenses 

The most effective way to utilize personal loans is to anticipate your financial needs before asking to borrow any amount. After exhausting every option for scholarships and grants, you can use college cost calculators to determine what remaining balance you will need to cover. You can use this estimation to help you decide what providers to use and what to apply for. Just remember that loans of any kind accrue interest, so if you take out too large of an amount it may take longer for you to pay it back because of the interest. 

4. Credit Building 

Paying back personal loans can be part of your strategy to start building your credit, equipping you to make bigger purchases in the future as you transition into your post-graduate livelihood. Be sure to make payments on time and develop a consistent history on a credit card as you gradually decrease your debt. If you are careful about continually paying off what you owe, taking a loan can be beneficial by providing you with an opportunity to make timely payments (which counts toward 35% of your overall score).