Financing your education can be a challenging decision. But with so many options available, students today have lots of ways to stay afloat while at university. From student loans to credit lines, there is almost too much choice — and it is easy to feel overwhelmed by the options.
However, it is critical that you thoroughly understand your options before you decide. Without research, you may accidentally sign up for a loan or another form of credit that you cannot afford to pay back. In this article, we are looking at student loans vs credit lines to clarify the difference between these popular options.
In the UK, students must cover their tuition fees and general living expenses. Typically, tuition fees alone cost up to £9,250 per year and this does not cover field trips, IT equipment, textbooks, course materials, travel costs and other non-essential course expenses.
Students can apply for Tuition Fee Loans to cover the cost of the course. These are provided by a student finance-specific lender and are sent straight from the company to your university.
You can also apply for a Maintenance Loan, which covers your living expenses while you study. The amount you are eligible for depends on where you live, when your course starts and your household income.
A credit line is a personal line of credit you can use when you need extra cash to help you out. It is like a credit card because you must make minimum monthly payments. But unlike credit cards, when you withdraw cash, it goes into your bank account, meaning you can make bank transfer payments and pay direct debits.
This is great for covering university living costs, but not overall course fees.
Yes. Credit lines can accept applications from students, but you also need to be in part time employment and their criteria for accepting you will involve a credit check. Depending on your credit history, the size of your credit line might be capped at a lower amount.
Are you reflecting on your university finances? Here are the key differences between these two options.
If you do not do your research, you may end up in debt due to charges, fees, interest and late payments. You must only borrow as much as you know you can afford to repay.
However, if you have noticed you are in persistent debt, a debt charity like StepChange can help you with free budgeting advice.
There is no right or wrong way to finance yourself at university. However, you can find the best route for your finances by researching before deciding. If in doubt, talk to a professional for personal advice.
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