I am in college, but want to leave the dorm to rent an apartment. How do I get a loan to pay my rent while in college?
Are You a Major?
How old are you? The range for students might be anywhere between 17 to 22 or so. You need to check your state’s law for when you are legally an adult (major). When you are an adult, you can sign a loan agreement.
Your parent is liable until you are a major. Therefore, you might find it easier to finance college expenses through your parents. They are more likely to qualify for loans and get the best terms.
Education Loan
You and your parent can apply for an education loan. These are normally used for tuition, books and accommodations, so rent would fit into this financing category.
Do you have a campus job or another type of employment? How much of your pay cheque goes to other student expenses? The bank will look at your debt load and income.
You can look at parent loans, student loans, personal loans or peer-to-peer loans. The Stafford and Parent PLUS loans are very popular.
If nothing else is available, then taking out an unsecured personal loan might be your last option. Unfortunately, since they are not government loans, they might have higher interest rates. Personal loans are more expensive and have fewer student-friendly features.
Credit Score
For most individuals, their credit history really starts after they graduate from college. Why? That is when you might get your first real job.
Most college graduates can expect to receive numerous credit card offers in the mail. So, don’t be surprised if you don’t have a credit score as a student. In fact, you won’t get an official credit score until you take out your first loan.
Therefore, the first loan terms are likely to be below average. You are a credit risk. The financial institutions wonder if you will repay the loan.
Plus, you are in school. Fortunately, most government lenders will give you a grace period of six months to a year to find a job, before you have to start repaying the loan.
That is the nice benefit of a government student loan. You can get low rates and a grace period before repayment is required.
Having your parent co-sign for the loan will give you the most money and lowest interest rates. They already have a credit score, so they are a lower risk than you. Money is available, you just have to find the right lender willing to take a chance on you.
Jim Treebold is a North Carolina based writer. He lives by the mantra of “Learn 1 new thing each day”! Jim loves to write, read, pedal around on his electric bike and dream of big things. Drop him a line if you like his writing, he loves hearing from his readers!