Student loans

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Student loans

Studying can be a very expensive exercise. On top of your normal living costs (rent, food, etc.), you also need to pay for your education. If you’re coming up a little short, a Student Loan might help. Here we look at how they work and how to pick the best one for your situation. 

What are student loans?

Student loans are a special type of personal loan designed to meet the needs of students. They are usually intended to pay for things like tuition and textbooks but can also be used for living expenses. 

Student loans also tend to offer a range of benefits over other personal loan types. For example, many lenders have lower interest rates and waive certain fees for some student loans. Some will also provide additional features, like redrawing or top ups, for free. 

How does a student loan work?

Student loans work much the same as any other personal loans. They provide access to a set amount of credit, which is funded as a lump sum. They require repayment over a series of regular instalments, with fees and interest incurred along the way. 

However, student loans differ in one important way – their eligibility criteria. 

Acknowledging that most students wouldn’t meet standard personal loan eligibility criteria, student loans often have more flexible requirements. Specifically, they tend to be less strict about an applicant’s credit history and income. This means that they’re an option, even if you only work casually and haven’t had a loan before. 

To be eligible for a student loan, you will generally need to be able to prove that: 

  • You are at least 18 years old  
  • You receive some form of income 
  • You are currently studying at a recognised education institution (e.g. University, TAFE, etc.) 

 

However, the specifics of this will vary from lender to lender. 

How do I choose the right student loan?

Before even looking at your options, you should make sure you really need a student loan. While access to additional cash can make things easier in the short term, going into debt can create longer-term problems. As such, you should only seek out a student loan when it’s absolutely necessary.  

What are student loans? 

Student loans are a special type of personal loan designed to meet the needs of students. They are usually intended to pay for things like tuition and textbooks but can also be used for living expenses. 

Student loans also tend to offer a range of benefits over other personal loan types. For example, many lenders have lower interest rates and waive certain fees for some student loans. Some will also provide additional features, like redrawing or top ups, for free. 

How does a student loan work? 

Student loans work much the same as any other personal loans. They provide access to a set amount of credit, which is funded as a lump sum. They require repayment over a series of regular instalments, with fees and interest incurred along the way. 

However, student loans differ in one important way – their eligibility criteria. 

Acknowledging that most students wouldn’t meet standard personal loan eligibility criteria, student loans often have more flexible requirements. Specifically, they tend to be less strict about an applicant’s credit history and income. This means that they’re an option, even if you only work casually and haven’t had a loan before. 

To be eligible for a student loan, you will generally need to be able to prove that: 

  • You are at least 18 years old  
  • You receive some form of income 
  • You are currently studying at a recognised education institution (e.g. University, TAFE, etc.) 

 

However, the specifics of this will vary from lender to lender. 

How do I choose the right student loan? 

Before even looking at your options, you should make sure you really need a student loan. While access to additional cash can make things easier in the short term, going into debt can create longer-term problems. As such, you should only seek out a student loan when it’s absolutely necessary.  

If you decide you definitely need a loan, you will need to work out how much money you actually require. It’s important to borrow only what you need, and you should be able to show how you calculated that amount. You should also make sure that the amount you’re requesting is affordable for you long-term. 

 You should also consider the type of loan you would like. Specifically, you should consider whether you want: 

  • Fixed or Variable Interest Rate: Do you want a fixed interest rate, so you know exactly how much you’ll pay over the loan termOr do you want a variable rate that moves with the market? 
 
  • To secure your loan: Do you want to provide a major asset (like a car) as security? Or do you want to minimise your risk and leave the loan unsecured? 
 
  • Payment flexibility: Do you want to pay the same amount each month? Or do you want to be able to make additional repayments to settle the debt quicker? 
 
  • To be able to redraw: Do you want the flexibility to take back any extra repayments you makeOr are you happy to do without this feature? 
 
  • To be able to apply for a Top Up: Do you want to be able to access additional funds by requesting an extension to your loan amount? Or are you happy to do without this feature? 
 
  • To borrow from a certain type of lender: Do you want to be able to go into a traditional bank branch to discuss your loan? Or are you happy to apply online, if it means keeping the cost down? 

 

Once you know exactly what you’re looking for, you can shortlist suitable loans. 

You can then use the comparison rate to work out which one offers the best deal. The comparison rate includes both interest and many fees and charges in its calculation. As such, it provides the best indication of the total cost of the loan. 

The loan with the most suitable terms and features, and lowest comparison rate, is probably the right one for you. 

Give yourself more room to breathe financially

Finance an array of expenses such as tuition fees, books, technological devices, accommodation and more with a loan that comes with a realistic repayment term that helps you better manage your expenses effectively

Tips for securing your student loan

Worried you won’t be approved? Here are a few simple things you can do to maximise your chance of getting a student loan.

Exhibit good financial behaviours

Lenders will want to see that you are financial responsible and save regularly, don’t overdraw your account, etc. This is particularly important if you have no credit history.

Enlist a Guarantor

A guarantor is someone who agrees to assume responsibility for your loan if you fail to repay it. This could be a friend or family members and should be someone with a good credit history. 

Provide security

Secured loans present less risk to the lender, so are easier to get to get and have lower interest rates. They require you to put up a major asset (like your car), which can be repossessed if you miss repayments.

Request a smaller amount

The smaller the amount you’re borrowing, the more affordable the repayments will be. As such, make sure you apply for only the amount you need.

Common questions about financing your big day answered

What more information about Student Loans? Check out these frequently asked questions.

How much can I borrow?

How much you can borrow will depend on the lender, the type of loan, and your circumstances. While some companies will offer Student Loans up to $50,000, you will need to prove you can afford the repayments. Most lenders will also want to see a breakdown of what you plan to use the funds for. 

How do I know if a loan is affordable?

A loan is considered affordable if you can comfortably meet the repayment schedule. As such, you should look at the repayment amount and work out if you can make it work long-term. To be really sure, try saving that amount for a few months and see how it impacts your lifestyle. 

How long does it take to pay back a student loan?

Most lenders allow you to choose your loan term, generally up to a period of 7 years. While a longer term may mean smaller repayments, it usually costs more over the life of the loan. As such, you should pick the shorter term you can comfortably afford. 

How often can I make repayments?
We have tailored our loans to come with flexible repayment options that can be paid weekly, fortnightly, or monthly.
Can I access funding to cover me until I complete my studies?

Yes. Whether you are doing a year course or completing a long degree, we will finance you every step of the way.

I’m an international student – can I still get a student loan?

Most lenders will require you to be an Australian Citizen or Permanent Resident to take out a Student LoanHowever, there are some that will consider applicants who are on Student Visas. As such, you should still be able to find a loan – you just need to do your research. 

Are there any penalties fees if I pay out my loan early?

Yes. However, be aware that some lenders will charge you an extra fee for settling your debt ahead of schedule. As such, you may need to pay more than the current amount owing to finalise the debt. 

I’ve never taken a loan out before – can I still get a student loan?

While having a good credit history can help you get a loan, it is possible to find finance without one. In fact, many Student Loan providers are more flexible on their credit history requirements. However, you should make sure you meet all of the lender’s requirements before applying. 

Also, if you are given a loan, make sure you make all of your repayments on time and in full. This will help you build a good credit rating and should make getting loans easier in the future. 

Most of my income come from Centrelink – can I still get a student loan?

Most lenders will want to see that you’re receiving some form of income. While many will want to see income from stable employment (e.g. a part-time job), others may accept support payments as income. This is particularly true for cash loan providers, who usually have more flexible income requirements. 

Can I get a quote without any obligations to apply?

Yes. We can offer you a quote and further walk you through your finance options with no obligation for you to apply.

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