Personal Loans for Students: What You Need to Know
What is a personal loan, and is this right for you?
Personal loans are short term loans to be used to cover personal expenses that cannot be easily afforded up-front. Particularly as a student, it can be difficult to source thousands of dollars for university textbooks, laptops, or other supplies required for your studies.
A personal loan is similar to other forms of credit, in which you borrow an amount of money to be paid back over an agreed repayment period with interest rates or fees. There are two types of personal loans: secured loans and unsecured loans.
Typically, unsecured loans are for smaller amounts, as they do not involve using an asset as security. Nifty Loans offers small loans from $500 to $2,000 that are unsecured.
Loans that are for over $2,000 will generally be secured loans. This means that you must have an asset to use against the loan as collateral; this could be in the form of a car, motorbike or caravan. The reason for this is because lending amounts above $2,000 comes with an increased risk to the lender, and collateral ensures that in the case you were unable to repay your loan as agreed, the lender can cover their losses. However, this is always a last resort.
Unsecured loans for higher amounts will often come with much higher interest rates and other fees and charges. This is why, for a larger loan amount, it is always ideal to take out a secured loan.
Student loans: What are they?
Australia has a student loan system implemented, mostly for domestic students, called the Higher Education Loan Program (HELP), formerly known as HECS. This program allows students to cover part or the entirety of their tuition costs upfront; the debts are to be subject to indexation in line with the Consumer Price Index (CPI). Once they start earning over a specified threshold, they must have their repayments taken from their wage. However, HELP loans are only used to cover enrollment costs and not costs like course materials or other expenses.
The Australian Government offers a ‘Student Start-up Loan’ for students to voluntarily apply for twice a year (if they are eligible). The loan amount offered is $1,094 and, to be eligible, students must receive Youth Allowance, Austudy or ABSTUDY.
If a student requires further financial support outside of this system, they may be required to apply for a personal loan. Since being a student usually accompanies working fewer hours/not having assets to secure a loan, you may only be able to apply for smaller amounts and may be offered higher interest rates. This is because lenders will be taking on more risk by lending to you.
What loans can you apply for as a student?
You will have different personal loan options depending on whether you are a domestic student or an international student.
You will likely have more loan options as a domestic student. Most lenders have eligibility criteria stating that you must be at least 18 years old and an Australian citizen or permanent resident. There may be other factors, including your income and credit history, that can impact your chances of securing a loan.
Nifty Loans offers affordable personal loans from $500 to $10,000. We are an online lender that specialises in delivering short term finance solutions to eligible Australians. Being an online lender allows us to be more flexible in our lending criteria, so even if you have a poor credit score, we may be able to provide you with a bad credit personal loan.
If you are an international student studying in Australia, you will not be eligible for financial assistance through the HELP program. However, most banks and other lenders may be able to provide you with a loan given you have the required visa.
Additionally, most universities have study loan options for international students. For example, the University of Sydney assists Canadian students in applying for funding from the Canadian federal and/or provincial governments.
As an international student, there are also a number of scholarships and awards available to you when looking to study in Australia. You may be automatically considered for them when you apply to specific universities. Otherwise, you may need to apply directly. You should discuss this with your university if you are unsure whether you qualify.
What can I use a personal loan for?
There is a lot of flexibility in what you can use a personal loan for; however, if you are approved for a loan based on your student status, you may be required to use the loan to pay solely for study-related expenses. This could include textbooks and materials, course fees or other relevant costs.
Regardless of whether you are a domestic or international student, there are a lot of personal loan options available to you. It will be beneficial for you to do your research and compare fees like interest and monthly payments to ensure the loan best suits your needs.
If you are ready to apply online for a personal loan, Nifty Loans offers quick loans up to $10,000. We offer flexible repayment terms and competitive rates; you could have your loan approved within just 60-minutes* (if you apply within our business hours). We are one of Australia’s fastest lenders; our customers often receive their money within 60-seconds** of the transfer.