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Loans for Young Adults: What are your Options?

15 December 2017 No Comment

Getting a loan is hard and sometimes, rigorous process is involved just to get your loan approved.  Can you imagine how harder it is then to get personal loans for young adults when they have very little to almost nothing in their credit history? It’s usually an operating procedure for loan providers to run a credit check on applicants. How else can they assess the risks you are posing them?

Creditors must conduct some assessments to give them an idea if you will be able to pay back on time or you have a history proving how you are as a creditor. Your reliability is important. Being young (and maybe out of work at the moment) does not mean, you can’t get a loan. It simply means you may have to choose from among unappealing interest rates. So what types of loans can you choose from?

There are types of personal loans for young people available.

  1. The easiest way to get money is through a loan from your family member. This doesn’t mean that you will not put an effort to pay it back or on time as agreed upon. You should still put this loan in writing however informal it may look. Be specific with the amount and date borrowed, interest rate.
  2. Student loans – maintenance loans and tuition loans are available for students studying at universities. Maintenance is a loan granted for students to get by while studying and the latter is a loan granted to cover the tuition fee. This type of loan is most probably the one with the lowest interest rate. Payments are automatically deducted from paycheck once the students graduated and started working.
  3. Career Development Loan – Career development loans are similar to student loans but intended for higher learning for two years at the most and comes with some restrictions on course choices. The money may be used for living expenses while studying a postgraduate course. The term of the loan will end, including the interest, within the last month of the course. Keep in mind that you’re bound for full payment of the loan regardless whether you finish the course or not.
  4. Start-Up Loan is an option provided by the government to support new entrepreneurs with advice, coaching, and loans. There is a business adviser for every scheme whom you can work with to qualify and a form must be completed in applying.
  5. Peer-to-peer lending can be considered, too, for young adults looking for a loan. More attractive options probably necessitate pretty decent credit history. You can have great chance of getting approved on this loan by promoting a business idea through crowdfunding.
  6. Owning credit cards with a zero interest period is a great help not just for young people but for anyone. Be sure to pay the balance before the period lapses otherwise you will end up incurring a hefty interest.

Work on your credit score as early as possible to be able to get a good credit history. Saving up is the best way to have money without loaning or any impact to your credit score. But if getting a loan is inevitable, narrow down your choices and choose the best one which you think you’re most capable of paying.

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