One of the biggest challenges most students face today is balancing between finances and studies. If you are enrolled in a college or planning to do so, you must not only be focused on your studies but have to find a source of income to cater for your tuition fees, accommodation, and other essentials. For many students, they may not have a reliable source of income and that’s where a loan over short time comes in handy.
It’s very common for students to take short-term loans. So, if you are considering applying for one, know that you are not alone. In most colleges, especially if you are studying a competitive course, the tuition fees can be quite high. And even if you do receive a formal student loan, it may not be enough to pay for significant expenses such as rent or purchase of equipment for school projects.
During such instances, a short-term loan can provide you with fast cash. For students, a short-term loan offers many advantages, but it also has its drawbacks. Before applying for a loan, you must weigh the pros and cons so that you can make an informed decision.
- Students with short term loans can afford college
Making ends meet as a student is not easy. However, short-term loans can be of immense help whenever you are in a fix. Are you late on paying your monthly rent? Do you still have some tuition balance to clear and the semester is almost over? Thanks to short-term loans, you can afford to be in college.
Whenever you meet a mandatory expense that you can’t afford at the moment. You can rely on short-term loans to help you cover that expense and you can continue with your studies. As a student, it is crucial that you identify needs worth taking a loan for. Do not take a short-term loan to pay for minor expenses such as food or transport. You can work part-time and use that money for such expenses.
- You can study, not only in every university but in your dream university
Even though the courses offered in every university are the same, some universities have more credibility than others. When you study in a recognized college, this can really pay off later when you are seeking employment. Because most companies will consider your application.
If you are planning on studying a certain course, your dream university isn’t only well-known, but it’s probably ranked as amongst the ones that produce the best students in your field of interest. The problem with the so-called dream universities is that they have higher tuition fees than their average counterparts.
As a student, you may have money for ordinary colleges. But with a short-term loan, you can top up the extra money and be able to afford not just every university, but your dream university. As a result, you can accomplish your dream of studying what you want in your preferred university.
- You will pay the loan faster and any revenue generated after graduating will go directly into your pockets
This is one advantage that you can’t get from student loans and long-term loans. Short-term loans usually have a repayment period of one or two years. With such a short repayment duration, in the future, you won’t be burdened by loans you took when you were studying. All the salary you will be getting from your job will go directly into your pockets. And this will give you a lot of financial freedom, which most people do not have nowadays.
- Short term loans can be expensive
The short repayment duration associated with this type of loan can be a blessing and a curse. As a blessing, we talked about how you can pay it faster and enjoy all revenue generated after graduation. It can also be a curse because the more you take, the more premiums you will have to pay in a short time.
With short-term loans, never bite more than you can chew. If you take a loan that you can’t afford, the monthly premiums will be very expensive for you to pay off. Considering that you are still a student and have expenses to pay for, adding expensive monthly loan repayments can drastically affect your financial life.
- Defaulting on your student loans can tank your credit score
If you pay off your short-term loan in time, your credit score will benefit the most as it will increase significantly. However, if you default, you will lower your credit score. And graduating with a bad credit score isn’t a good way to start life as an adult.
Life after college isn’t always a smooth ride, and you may need to get some financial aid from time to time. A bad credit score exposes you to abnormal interest rates and strict borrowing terms. A word of advice, before taking a short-term loan as a student, evaluate your ability to repay the loan in time.
- You will have to work while studying
To help with paying off your short-term loan, you must get a part-time job. Even though this is something most students usually do, in the case of one with a loan to pay, it is mandatory that they earn as much money as they can. So that they can repay their loan in time.
Please note that being a working student isn’t easy. You will have to balance between work and studies. At times, you may have a double shift in the evening and have classes or assignments that need to be done. You, therefore, need to be disciplined.
The Bottom Line
For many students, short-term loans can offer financial relief in situations when they need money for tuition, accommodation, or other school-related projects. However, they also have certain risks. If you are a student considering taking a short-term loan, you need to be aware of the pros and cons so that you can decide on the right course of action.