Australian Student Loans

What are Student Loans

Student loans have been designed to help full time students with their education costs and living expenses whilst they are studying and not earning any money. There are 3 different places where you can get a student loan from. The first is a Government sponsered loan such as HECS which can cover your university course fees. The second if from the tertiary institution or school itself and the final source of student loans is from a bank or credit union in the form of a personal loan. Each of these 3 sources of student loans has their own eligibility criteria, as well as its own advantages and disadvantages.

Who are Student Loans Suitable For

Anyone who is completing full time study, is under financial hardship and can prove that they good acedemically is eligible for a student loan. This criteria proves that they need the assistance and have a good chance of completing their studies on time and getting a decent job at the end of it. People who getting a university education, living away from home and studying a course where they will be paid well once they have finished are the most likely candidates for student loans.

Main Loan Features to Look For

Every student loan will have a range of different features and benefits, but the most important ones to look out for are:

• Fixed or Variable Interest Rate.
• Repayment Terms - when do you have to start repaying the loan.
• Extra Repayments Allowed - so that you can pay off the loan as soon as possible without incurring extra fees.
• Loan Term - how many years do you have to pay the loan back over.

Questions to Ask about Student Loans

If you are looking at obtaining a student loan for you education then you should make sure that you get detailed answers to all of the following questions.

1. What is the interest rate for the student loan?
2. At what point do you need to start paying back the student loan?
3. Can the interest be compounded, which means that you don't have to start paying it back until you start working?
4. How many years is the loan for and can extra repayments be made in order to pay it off sooner?
5. Will there be a fee if the student loan if paid off sooner?
6. Is the interest rate fixed or is it subject to change?
7. If the interest rate is variable then how many months notice is given before it changes?
8. Are there any monthly fees or hidden charges?
9. What documentation must you show in order for the student loan to be approved?
10. Is a guarantor required to sign for the loan, which effectively makes them liable for the loan if you fail to pay it back?

Loan Tips and Hints

It is always a good idea to start paying back your student loan as soon as you begin working. By doing this you will save lots of money on interest repayments over the course of the loan.

If there is some abbreviations or loan terminology that you are not sure about the meaning off then you can check out the loan definitions page, which has a detailed explaination about some of the more confusing aspects of getting a student loan.