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What is student line of credit and why is it important?

I’m frustrated in my search for ways I can raise my college fees and I’m now on the verge of losing hope. Though I already have two student loans, I have not been able to meet all my college expenses. Hence I’m looking for additional credit for college students to help get me out of these problems. However, I have realized that it is quite difficult to get credit for students with bad credit or no credit history. What is the student line credit? Is it an option for me?

Dana Keller

in Student Loans

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Kathy Robinson on May 24, 2018

Definitely, it is designed for students in your kind of situation. While grants, scholarships, and private student loans may get a huge load of college expenses off your back, they may not be enough to cover all your expenses at the campus.

Hence students’ lines of credit are established to fill in this gap. It is better than a student credit card. You don’t need to have a credit history as apparent or guardian is required to cosign it for approval.

Once you have it, there is no limit to what you can spend your credit. It may be towards buying a textbook that you need for a particular course, paying for school trip expense or buying coffee. It can assist you in making payments on time and tracking how you are spending. You need to be disciplined; however, as you can find that you have exhausted all your credit on inconsequential things.

Some important features of this credit for a college student option:

  • Requires co-signer: unlike federal student loans where you can speak for yourself, this type of credit requires that you have a co-signer. Most lenders will ask for a parent with a fairly good credit history. They will act as a guarantor to your loan in case you forfeit on payments later on.
  • Lower interest on credit: as this credit is designed for students who will most likely start off with low-income jobs after graduation, the interests charged are quite low as compared to personal credit.
  • Payment of interest alone during the time you spend in school: what is most attractive about this loan is that you don’t need to make repayments while in school. You will only be paying the accruing interest. As mentioned above, the interest rates are not very high.
  • A grace period for payment after graduation: you will get a 6-12 months’ grace period after you have completed college to allow you time to look for employment and plan how you are going to make repayments. At this time, you will only be paying interest accruing on the debt.
  • Improves your credit score: if you are a student with bad credit, this credit is a good way to improve your credit. Make payments on time and use the credit often to show activeness.

However, I would advise caution in the usage of this credit. Remember, you will pay back this money; it is not free. 

Roger Moore2 years ago

I would also like to add two more advantage of taking a student line of credit.

  •    First, you can get quick cash in case of an emergency. Remember that as a student, you pretty much have no savings. Plus, unless you are working part-time in a low-income job, you also have no source of income. Therefore, when an emergency or unplanned for expenses comes knocking, you will have nowhere to get the much-needed money. The good thing is that there are no restrictions as to what you can do with the money.
  •    Second, you can choose a repayment plan that suits you. Once you have finished college, speak with your lender to know that options that are available to you. You can also ask for repayment information at the time you are applying for credit. Some banks offer very lucrative deals with a grace period running up to 12 months. 


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