Student Loans and Off-Campus Housing Costs?

Student loans will rarely cover expenses like off-campus housing costs. Most student loans are allocated in the sum needed for tuition for a given term. Federal loans and some private loans are deposited directly into a student's account with the college or university, meaning no portion of the money can be spent outside of tuition. If you need to cover the expense of living while you are a student, you will need to seek specific loans designed for this option. These loans tend to have higher interest rates than tuition loans.

Student Credit Cards

Student credit cards are a good option for making off-campus purchases, but they will rarely be sufficient to cover the cost of off campus housing in its entirety. Typically, a land lord will require rent in the form of cash, check or money order. However, credit cards can come in handy when it is time to pay bills on the home or apartment. Electric bills, gas bills and other utility bills can all be set up to the paid by credit card. In a given year, these bills may be under a few thousand dollars, depending on the rental and the location of the college or university. This means a borrower could reasonably make interest only payments all year, which amount to $30-50 on most credit cards, and then repay the balance through summer jobs and internships. 

Student Personal Loans

Personal loans will be more valuable in actually meeting rental payments than credit cards. Students, though, will have a hard time qualifying for low rate personal loans. Further, it may be challenging for a student to get high enough limits to cover the housing cost for a full school year since a student is likely to have little to no income. To compensate for this, many students will use cosigners like parents or benefactors. Others will elect to have part-time jobs. Students who are participating in athletics, school programs or are members of minority groups should seek stipends from the school's financial aid office. This can help shoulder some of the burden of living cost in order to make the loans smaller. 

Secured Loans

If a student has an asset, such as a car, prior to seeking loans, then the student will be considered a lower risk borrower. The student can use this as collateral on the personal debt. A car worth about $10,000 should be sufficient to serve as collateral for the majority of the cost of off-campus rent in a given school year. This will make the interest rate lower. Unfortunately, personal loans are typically issued on an installment basis. This means the student will continue to have to make debt payments throughout the year. Thankfully, there are lenders that are sensitive to the difficulties this creates. These lenders will extend loans to students at moderate interest rates and provide grace periods on the debt. Borrowers looking for this structure should seek banks that advertise student living loans. The office of financial aid at a given college may also have insight to student lenders in the area.


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