Sooner or later most of us will be in a situation where we as students just do not have any money – either because we have just got our first job or because we have to move. It is therefore not abnormal that young people today use the opportunity to borrow money in order to make everything work together.
However, there is much to think about and many considerations to be made when borrowing for the first time. Not only do you need to get the best and cheapest loan, but also make sure you have the means to repay the loan every month.
But don’t worry. We see no reason to make things more complicated than they need to be if you have considered taking a loan as a young person. We look at how you should relate when you first borrow a loan.
You can easily borrow as young
Although it can no doubt be harder to take out a loan if you have just become an adult, there are still several different options when you want to borrow a loan. As a student, your cheapest choice will most likely be a SU loan that you will first have to pay back when you finish your education. An SU loan gives you a fixed amount each month, but it is, however, a prerequisite that you already receive the regular SU rate.
Besides the SU loan, there are many other options depending on which provider you choose of course. In any case, you must first and foremost find out how much you need to borrow. There is no need to borrow more than most necessary, as you would simply depend on a lot of interest in the future. More importantly, you make sure you have the economy to pay off the loan every month. A late payment can result in a fine, but if you miss your monthly payments, it can have a big impact on you – and unfortunately, not all young people discover this in time.
You can borrow it for that
There are many myths about loans, and it’s a shame. There are many allegations that say that one must absolutely document what the loan is to be used for. This is usually the case only if you choose to take out a loan in a bank. If, on the other hand, you find a good offer for a loan on the web, you can easily refrain from specifying what you need to borrow – in the vast majority of cases you can still expect that you are not even asked to provide it. So even though a bank loan is a bit cheaper in most situations, you get more freedom when you borrow online.
Remember to look at interest rates
When you have to start borrowing, there are many things to keep track of, and it is easy to be overwhelmed and forget to read all the small items written in small print. However, we cannot emphasize the importance enough by thoroughly familiarizing himself with his loan contract so that you are exactly aware of what you are going to do.
How do you find the cheapest loan? The easiest way to do this is to use one of the many tools available online for free. These tools are usually called loan calculators and give you a complete list of all loans where you are likely to be granted the loan immediately. Here you can also see the total price of each loan, so you are aware of how much you need to spend.
The most important thing to look for is the interest rates. All loans come with interest, so if we take the consumer loan as an example, it is important that you find out the exact interest rate on consumer loans . The provider is obliged to inform you of all the costs of each loan, so once you have found the loan with the lowest interest rate, you can usually be sure that you have also found the cheapest loan.
Record a loan with an interest-free period
As with credit cards, today you will find some loan providers that offer loans with an interest-free period. This period can range from anywhere from 1 to 9 months, sometimes longer. The interest-free period basically means that you do not have to pay interest on the loan. This almost always results in a much cheaper loan. However, you must still make sure that the interest rates are not towering in the period when you have to pay interest on the loan.
Although it is rare, it is thus possible to find a loan with an interest-free period that is actually more expensive than an ordinary loan with interest – simply because the interest rates are so high when the interest-free period is over.
No credit rating? No problem
If you have just become an adult, you are likely to have no credit report yet. Although this may make it harder for you to start a loan at first, it’s a great start and it’s important that you make sensible choices from now on!
There are many things that can improve your credit rating, and most actions do not require you much. Did you know, for example, that you can improve your report by simply voting when there is a choice? Other ways to build a credit rating are by creating a mobile subscriber that you pay on time. To make sure you get a good credit rating, it is extremely important that you pay off all the bills on time – as it will otherwise appear on your report.
However, if you struggle to get your credit report on the track, don’t worry. It may take some time. In the meantime, we recommend that you examine whether you are eligible for SU where your credit report is not considered.