SPEND RESPONSIBLY - Managing credit for students

Campus loans

Another source of credit for tertiary students is ‘campus’ loans. Lenders generally offer these loans as part of a student financial package that includes account fee concessions and a credit card option.

Campus loans are quite different from traditional personal loans. Campus loans often have no loan establishment fee and the interest rates may be lower. The biggest difference though, is that no repayments are necessary until you have graduated.

The amount you can borrow with a campus loan may depend on your course of study, and in some cases, you may be asked to provide a guarantor. Be aware though, that while the repayments are deferred until your studies are over, the interest charge is not. Let’s say, for example, you borrow $5,000 in your first year of a three-year course. At an interest rate of 11% p.a., by the time you graduate the accumulated debt (including interest) will have grown to $6,840. So it pays to use these loans carefully. Borrow only what you need, and make repayment of them a priority as soon as you graduate.