Navigating Personal Loans as a College Student
A guide on how to know when to ask for a personal loan as a college student.
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College often brings several financial challenges, causing many students to contemplate the idea of taking out a personal loan. As it can be helpful financially, it’s hard to tell when or if it’s a wise move.
Around one-third (33.1%) of college students carry personal loan debt as it is the most common debt among students, according to The State University of New York’s (SUNY) blog. Therefore, it is essential to consider all possibilities before committing to borrow money.
Here are some considerations to help decide if taking out a personal loan is the right choice to make.
Emergencies
A personal loan can be helpful for unforeseen and urgent emergencies such as medical bills or unexpected travels. It is important to ensure it’s a genuine emergency before taking out the loan.
Educational Purposes
Struggling to pay for necessary school supplies such as textbooks, electronics, dorm essentials and more could lead to taking out a personal loan. However, it is best to compare and contrast all aspects before making the decision.
Job Gaps
Facing a temporary gap in your part-time or full-time job and need money for living expenses? A personal loan could offer a lifeline. Yet, make sure to have a concrete repayment plan when you find a new role and your income balances out.
Internship or Study Abroad Opportunities
Career-changing experiences like internships or study abroad opportunities may require upfront or additional costs such as room and board or travel fees. If the opportunity aligns with your career goals, a personal loan could help aid your future.
Explore Alternative Funding Options
You should exhaust all available options before asking one to borrow money. Therefore, looking into scholarships, grants or on-campus work-study jobs could help minimize the need for a personal loan.
Kailyn Rhone, (she/her) is from Florida, but is an NYC-based journalist covering education, technology and culture. Follow her on X: @onlykailyn.
Edited by Nykeya Woods