Think Ahead and Get Ready As always, it is better if you think ahead and start preparing yourself for obtaining a student loan. To do so, it is good to start establishing a credit history by opening a savings and a checking account on a bank. What you need to do is prove yourself worthy of credit by showing the bank you can put aside at least a small amount of money every month. Bank Accounts with Pre-agreed Student Loans Some banks offer accounts with pre-agreed loans for students. Even if you dont qualify yet, get a regular account on one of those banks as you will be able to upgrade your account later and seize the benefits of having a pre-agreed loan or line of credit. These special accounts offer this benefit without doing credit checks. If you wonder why no credit checks are carried out, the reason is that a credit check was performed when the account was opened. Since a lender has no records of your credit behavior, a credit check is mandatory. But the bank has a history of your financial transactions carried out with your accounts and thus does not need to pul your credit reportl. Student Loans or Lines of Credit These loans come in the form of regular loans or lines of credit. Lines of credit remain open as the lender retrieves money and returns it as long as a certain limit is not reached. However, the interest rate charged is variable and thus changes along with market conditions. Pre-agreed student loans on the other hand, come with fixed interest rate, a fixed amount and preset repayment program. When paid off, these loans can be renewed, but at this stage, the bank may require a credit check. Not a comprehensive solution Pre-agreed student loans are a great way to finance extra expenses during college season. The loan amount wont be enough to finance all your way through college. However, combined with federal student loans, these loans provide relief to cash flow difficulties and emergencies. And given that there are no credit check requirements, they really come in handy under difficult financial situations. So if you are looking to finance your everyday expenses or some extra expenses like study material, a month of rent, groceries, a new computer, etc. these loans are the right option for you and you wont have to go through stressful application processes and credit checks. Just make sure there are no stains on your financial relationship with the bank. Avoid late payments, bouncing checks and missing payments. Otherwise youll have to resort to other lenders that will definitely check your credit report before granting you a loan. |
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