Yes, as long as you meet the eligibility criteria for a payday loan, you are entitled to one! The most relevant criterion is that you must be over 18 years of age.
Students are prone to encountering debt and having to pay bills like debt and car insurance. At such a young age, it’s hard to know how to juggle these strains, and so many turn to loans.
It’s best to avoid payday loans at such an early stage of your financial life. There are plenty of alternatives. Here is some key information:
There are plenty of preferable options for students than pricey payday loans.
Can I Get A Payday Loan As A Student?
Yes, as long as you meet the requirements, such as:
- Being over 18
- Being a US resident
- Having an active checking account
- Having a regular income (usually of at least $500 per month)
- Have valid ID such as a driver’s license or passport
Direct lenders will perform credit and affordability checks before offering a loan to suit your needs.
Why Shouldn’t I Get A Payday Loan As A Student?
Expensive
Payday loans have an average of 396% APR (cost of borrowing) in the US which is huge. This means that for every dollar you borrow over the course of a year, you pay $3.96 for the privilege. And this is assuming you don’t run into any issues and have to pay late fees. In short, payday loans are pricey and if, as a student, you choose to take one out, it can be a setback.
Credit Damage
Only 14% of borrowers can easily pay off their debt. The rest default, rollover, and struggle with their repayment plans. For those borrowers, so for most, they end up diverging from how they committed to make their repayments, and this damages their credit score.
A credit score helps lenders decide whether to approve an individual for a loan. A credit score is represented by a number between 300 and 850 and reflects how reliable a borrower you have been previously. In the US, the average score is around 698, and you can check your score via the FICO website. The higher your score the better. If you are young, you should be striving to have as high a score as possible.
What If I Have Bad Credit?
Even if you have a lower than ideal credit score, many lenders are willing to provide you with a payday loan, but as mentioned above, failing to pay them back will only worsen your current credit status.
Keep in mind, student payday loans are not a long-term financial solution. They are for urgent needs, not for frivolous spending. They should always be looked upon as a last resort.
How much you can borrow will depend upon your financial situation, such as your credit score.
What Else Could I Do?
Cash Advances
These are essentially early paychecks provided by an employer. If you have a part-time job while you are a student, you could be entitled to one. If you need cash, ask your employer what work-based support can be provided to you.
Loan From A Loved One
These are flexible and typically a cheap means of borrowing. These can be damaging to relationships, if you are open and honest about your circumstances, and about your repayment plan, these can be a great lifeline. This is because they are typically more flexible than your average, high-street loan.
Credit Card
A credit card is a line of credit which you must pay back in addition to any interest (average rate: 16.13% in the US) applied to the loan. Credit limits are determined by lenders and will depend upon your financial past, current situation, and how many cards you have, alongside other factors.
There are plenty of options out there, and so much information available online. Using comparison websites can help you compare interest and maximum lines of credits, and help you understand which option is best for you.
