Many students in Australia rely on personal loans for their educational needs. Personal loans for students can help pay for:
- Daily expenses
- Studying abroad
- School supplies
- University tuition
Personal loans fall under two categories: a secured personal loan or an unsecured personal loan. A personal loan for education is considered an unsecured student loan since there is no collateral, such as new car, involved in the lending. Personal loans for unemployed or part-time/casual employed students will usually have higher interest rates because there is no property for the bank to seize if the loan goes into default.
However, it is not impossible for students to find decent personal loan deals. Students looking for low interest personal loans can use RateCity’s personal loan calculator to find suitable personal loan offers for their circumstances.
Why do people use personal loans for education?
Personal loans can come in handy for students who aren’t supported by their parents or lack sufficient savings to afford the costs of studying. Cheap personal loans can be useful, as many students are unable to work full-time. Finding the best personal loan rates can assist students with living expenses, school supplies, studying abroad and tuition.
Easing the financial stress that can come with higher education allows students to focus more attention on their studies. A higher education can be an important factor in achieving future financial success.
What are the main features of a personal education loan in Australia?
Not all personal loans for education are the same. Here are some of the available features:
- Redraw facility – This option allows students to borrow money already paid on their loan that is in excess of regular repayments. Conditions may apply, such as a variable interest rate.
- Fully drawn advance – This feature lets borrowers receive the fixed amount on their loan upfront with a plan to repay at a later date. This could be a good option for students who anticipate full employment post-graduation.
- Extra repayments – Most banks will allow borrowers to give more than what is owed on their monthly payments. This can help shorten the period of the loan and the interest paid.
- Secured – A secured loan requires collateral from the borrower, such as a car. A secured personal loan for education may come with a lower interest rate than an unsecured personal loan.
What are the pros and cons of student personal loans?
There are benefits for students who receive a personal loan to assist them through their education. Easing a financial burden allows students to focus more on what’s important: a higher education.
However, students who are not working or only work part-time/casually could see higher interest rates and may require a co-signer. Student personal loans for bad credit are sometimes available but tend to have less favourable features than standard student personal loans.
Students who need a loan are encouraged to use RateCity’s personal loan comparison feature to help find the best available loan for their financial situation.