Student Loan for Accommodation: Use Student Loans For Rent

Student Loan for Accommodation: Many students opt for education loans when studying abroad to cover tuition fees. Apart from the tuition fee and academic expenses, they need to critically consider and look for budget-friendly student accommodation. They are often left wondering whether they can get student loans for accommodation. If yes, what is the best way to apply for an accommodation loan? 

In this article, we will answer these questions in detail, so that students who are planning to study abroad can have a better understanding of the types of student loans for accommodation, education, etc. 

Student Loan for Accommodation

A student loan for accommodation or accommodation mortgage is a type of loan where students seek out financial assistance from public or private banks or institutions. An agreement is made between the two parties for a temporary period. The objective of student loan for accommodations is to assist the student or borrower with their finances, especially when they do not have sufficient funds by themselves due to insufficient income, credit history or collateral.

A lot of students apply for student loans, where they receive money to cover their academic expenses. The primary function of a student loan is to cover your academic expenses, i.e., your tuition and stationary fees. The student loans can either go directly to your school or get credited into the student’s bank account. 

Also Read – Student Accommodation in London

Some might think of student loans for accommodation as free money, but the reality is that you need to pay the entire money back at an interest rate. If you apply for a student loan for accommodation, you will be the primary debtor and will have to take full responsibility to repay the entire amount with interest in time. You will have a guarantor or the accommodation party, which will assume liability for your failure to pay the loan back. The guarantor’s role is to provide an additional layer of security to the lender, reducing the risk associated with the loan.

Does Student Loan Cover Accommodation?

In simple terms, if you ask whether your student loan can cover accommodation expenses, the answer would be, Yes! Student loans not only cover the following expenses-

• Tuition fees
• Accommodation expenses (hostel fees)
• Travel expenses
• Insurance
• Examination fees, library fees, laboratory fees
• Other expenses such as books and study materials

This means that you can pay your accommodation rent using your education loan.

Depending on the type of loan and your lender, the money you borrow will right go directly to your university or institution, or into your bank account, which you can later use to pay your tuition fees. You can use the loan money at your own discretion, such as paying for your rent or miscellaneous. You must choose student accommodation which is close to your university and fits your budget and avoid unnecessary expenses. When applying for a student loan, students must ensure that their education loan includes aspects other than academic expenses, such as rent, and related expenses.

Things to Consider When Taking Student Loan for Accommodation

When you are applying for a student loan for accommodation, make sure you operate on budget. Considering the following will help you get a cheap student loan for accommodation- 

• Consider a Guarantor who can promise to pay off your loan in case you are unable to do so. This provides security to the lender and they offer student accommodation loans at lower interest rates and better terms and conditions. 

• Opt for a shorter loan repayment period. This will save you from paying interest on extended years. For example- if you choose to repay your student loan for accommodation within 10 years instead of 15 years, you save yourself from paying interest for the additional 5 years.

• Avoid taking loans that have additional establishment fees and admin fees. Most student loans don’t have these, but it is still important to research, compare and opt for loans that are comparatively available at lower interest rates and have no additional fees.

Education Loan VS Accommodation Loan

A student education loan and accommodation loan serve different purposes and are designed to cover different expenses, that are related to the student’s education abroad. The availability and details of an educational loan and accommodation loan can vary depending on the country, financial institution and the student’s circumstances. The table below highlights the key difference between an educational loan and an accommodation loan.

Education Loan	Student Loan
This type of loan is specially intended to provide financial support to students to cover their academic expenses, such as tuition fees, stationeries and other related expenses.	This type of loan focuses on covering the cost of accommodation, such as rent for an apartment or dormitory. This allows students to secure a place to live abroad while studying there.
Education loans are typically disbursed directly to the university or to the student’s bank account.	Funds under an accommodation loan may be disbursed directly to the student or the landlord, depending on the lender’s policies.
Education loans often have repayment terms tailored for students, such as a grace period after graduation before repayments begin.	Accommodation loans can vary depending on the lender and the specific terms of the loan agreements
There are flexible repayment options and lower interest rates when compared to types of loans.	They have shorter repayment periods and higher interest rates when compared to education loans.

FAQs

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