Applying for Private Loans
There are a wide variety of loans and grants available to those wishing to continue their education to higher level. However, the fact to which any student will attest is that the cost of living seems to continue its inexorable rise every year, well above both the rate of inflation and the rate at which the loans increase.
As a result, you may well be looking for other means of finance to get yourself through your degree. Many students take on part-time jobs, but there are many circumstances in which this simply is not feasible; it is generally thought that, if one chooses to go to university, it makes more sense to spend as much time as possible working for a degree, rather than working in a coffee shop.
OverdraftsThere are two particularly popular forms of private finance amongst students. The first of these is an overdraft. Banks, desperate to secure your custom from as early an age as possible, are falling over themselves to offer 0% interest overdraft facilities for the duration of your degree. At the time of writing, the largest 0% deal you could find was almost £3000. An overdraft is an excellent way of meeting your day-to-day finance needs; the cash is always available, and you can get to it in exactly the same way as any credit balance you may have on your account. There are potential downsides, however. Obviously, you must remember that you will eventually have to pay back the money. Your bank has the right to demand immediate repayment at any time, although this very rarely happens. Perhaps most importantly, though, is the interest rate. While you clearly won't get a better deal than 0%, you should make sure that you are not tied in for any period of time after your degree ends; if this is the case, although you will only pay interest on the proportion of your overdraft that you have used, this may not be the most cost effective way of borrowing.
Credit CardsThe other most popular option is a credit card. My personal advice would be to steer well clear of this idea. Your credit rating will be low, and so you will be restricted to cards which will offer very poor rates of interest. With some of the worst performers charging up to 35%, this is a very ineffective method of borrowing.
Finally, you may well have the option to apply for a private, personal loan. This will mean that you would be loaned a single lump sum, which may well help towards large expenditures such as a computer. You are likely, however, to face the same problems as with credit cards; by definition, your credit score is likely to be poor and, as such, you will only be offered less than favourable deals by most lenders. If you desperately need a personal loan, however, you should make every effort to arrange as short a repayment period as possible. Although this may prove to be a financial strain in the short-term, you will end up paying back a far lower total sum.
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