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Student Accommodation Loan
Compare your options to get the best personal loan for student accommodation.
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What is a student accommodation loan?
A student accommodation loan is a personal loan product designed to give you the financial support you need to help fund your student accommodation. It allows flexibility and less strict criteria to ensure students can be approved, even though they may not meet traditional loan requirements. Lenders are aware of this fact, as they usually haven't worked full-time and are instead working casually or part-time. Even if you don’t have a strong credit history, proof of consistent income or proof of significant savings, you could still be successful in obtaining a student accommodation personal loan.
When applying for a student accommodation loan, you will still have to provide all the usual documents, including bank statements, payslips, tax returns and identification. In addition, most lenders will require you to be an Australian citizen or permanent resident, although some can provide loans for those studying in Australia from abroad. As a trade-off for the less strict criteria, lenders only generally approve smaller loan amounts and provide stricter loan terms and repayments for borrowers to abide by.
How do I get a cheap student accommodation loan?
Most students operate on a budget, so it’s important that you know how to get a cheap student accommodation loan. There are a few things you can do to save money on your loan, including:
Consider a guarantor
A guarantor is a family member or close friend who is liable to pay off your loan if you can’t do so yourself. Using a guarantor will provide a form of security for the lender and ensure you can get a lower interest rate and better terms on your student accommodation loan to save money.
Avoid loans with extra fees
If your student accommodation loan has extra fees, you could end up paying a substantial amount more. Make sure you avoid loans with costly establishment fees or admin fees which can each run up the total cost of your student accommodation loan. While student loans are unlikely to have these fees waived, you can still search for and compare those which have cheaper linked costs.
Shorter loan term
If you opt for a shorter loan term, you will save money on interest and any ongoing fees. While shorter loan terms will require more expensive repayments, it can be a worthwhile trade off.
Types of personal loan
With an unsecured personal loan, you can potentially borrow as much as $75,000 without the need to attach any valuable assets, such as your car, as security. These loans are the most widely available and often the quickest, with same-day approval possible.
Secured personal loans, on the other hand, make use of collateral. This lowers your risk profile in the eyes of a lender, potentially lowering your interest rate and expanding your borrowing power beyond what you may be able to get through an unsecured loan.
Variable interest rates remain open to fluctuation during your term. This means you can benefit from decreasing rates and save on your loan if the market heads in that direction, although you’ll also pay more if rates start rising.
Fixed interest rates are locked at the beginning of your loan and remain constant throughout your repayments. This acts as a valuable protection against interest rate increases, as your loan will be unaffected, but you’ll miss out on potential drops as well.
If you’re paying off multiple debts at the moment, particularly those with high interest (such as credit card debts), consolidating them into one payment can not only make them more convenient to manage but also potentially save you money overall.
Looking to take off on a holiday with your family but want to pay it off at your own speed? Travelling can be expensive, so you can distribute the cost of your next trip over a period you’re more comfortable with by taking out a personal loan to pay for it.
There are so many costs that go into making your dream wedding a reality, from venue hire to catering to dresses and suits and so much more. By taking out a personal loan, you can start planning the big day you want, even if you can’t pay for it upfront.
Home improvements are desirable for a range of homeowners to help keep their living space fresh and interesting, not to mention increase its value. You can get past the financial hit of renovations with a personal loan paid in instalments.
Personal loans aren’t limited to PAYG employees, though. If you’re running your own business, you can still be approved for financing by submitting tax returns and other alternative documents instead of payslips and utilise your funds however you wish.
There’s a variety of expenses which come with being a student, ranging from the cost of your courses, textbooks and computer to your accommodation. Taking out a personal loan can make these costs more manageable by spacing them out.
Some lenders offer green personal loans, which are designed to be used for energy-efficient appliances and products such as solar panel and air conditioning installation in your home. You can qualify for lower interest rates and fees with this loan.
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How do I compare student accommodation loans?
Interest rate
It’s important to compare interest rates as they will play a big role in determining the overall cost of your student accommodation loan. Try to find a low interest rate but don’t neglect other costs as a loan with the lowest interest rate isn’t always the best option. Also consider a variable or fixed interest rate as that choice can also contribute to your loan’s overall cost. A variable interest rate will fluctuate throughout your student accommodation loan’s term while a fixed rate will remain the same throughout your loan term.
Extra fees
As a student, any extra fees on your loan will prove costly but they can be easily avoided. Prioritise comparing loans with lower establishment and monthly fees to get a cheap student accommodation loan. While it can be beneficial to get a loan without expensive extra fees, make sure you don’t choose one which doesn’t meet your needs.
Loan features
Loan features can add great value to your student accommodation loan. Compare loans which allow additional repayments and have redraw facilities if you’re looking for these features. Additional repayments will allow you to get ahead on your loan repayments whilst saving money on the total cost of your loan. Redraw facilities allow you to withdraw any additional repayments you make. However, certain lenders may charge a redraw fee of up to $50, so it’s important to look out for these.
Loan term and repayment frequency
Loan terms will dictate the cost of your repayments and the amount of interest you pay across your loan’s duration. You can choose between loan terms of one and seven years. If you’re looking for cheaper repayments, you could consider a long-term loan, but bear in mind that this will result in a higher total cost. In addition, compare weekly, fortnightly and monthly repayment schedules to best suit your income or financial situation.
Frequently asked questions about student accommodation loans
Borrowing limits will vary between lenders. As students will likely have little to no borrowing experience and potentially no full-time income, they will struggle to get approved for expensive personal loans.
Yes – certain lenders will let you pay off your student accommodation loan early, but they may also charge a fee to help recoup any money lost from interest payments or ongoing admin fees.
No – unfortunately, HECS-HELP loans are only available to students who are Australian citizens and do not cover the costs of accommodation. These are designed to fund the cost of students’ education, so they can only be used to pay for tuition fees at your university or higher education institution.
The processing times for student accommodation loans will differ between lenders and can change on a case-by-case basis. Your application is likely to be processed within one to two business days, as online lenders who can more freely cater to students’ finance needs are able to process personal loan applications quickly.
While student accommodation loans are designed and taken out to provide funds for your student accommodation, the use of the funds is flexible once it’s transferred into your account. You're able to use any extra funds to help pay for other living costs, such as food or vehicle maintenance, or for any other approved purpose.
To compare student accommodation loans, you should compare online with Savvy. Savvy makes it easy for you to compare the best student accommodation loans across an array of lenders to ensure you get the best option for your needs.
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