We can hear your bank notification ping; your student loan got credited into your account! You can now pay the tuition fees for your dream university and rent an apartment for your comfortable stay during your journey. Yes, you read it right. You can use your loan to rent an apartment. You will find all the information about paying rent with student loans in this blog.
Understanding Student Loans and Accommodation Costs
To help cover the costs of post-secondary education, including housing expenses, many people take out student loans. When you get a student loan, the primary function of it is to pay your tuition fees. As mentioned, depending on the loan, your student loan might directly go to your school, or it will be directly credited to your account, after which paying rent with student loans is possible.
If you want a federal-backed student loan, you will have to fill up a free application form with personal details. Where to do this, you ask? Go to your school’s financial aid office, and they will give you the said form. Along with your student loan, if you have been granted a scholarship, managing your student finances becomes easier, and loan management becomes easier.
Landlords always want security deposits and monthly rent paid on time, and college financial aid departments typically do not distribute remaining student loan money until the start of the academic year. You should make sure you have enough money to pay these expenses if you plan to live off-campus.
You can choose either a federal student loan or you can apply for a loan through private lenders as well that offer loans that cover your living expenses too. This will help you with paying rent with student loans.
Can you use student loans to rent an apartment?
Yes, you can use your student loan to rent an apartment. Your student loan doesn’t just pay for your school expenses and allowance; it also pays for your living expenses, such as your apartment. This means paying rent with student loans is possible.
Depending on your student loan, the money will be sent to you directly, or it will go to the school, which will then be given to you with the tuition already deducted. The money from the student loan would then be used at your discretion, such as paying for miscellaneous or your apartment. Deciding where to live for the rest of your school years is a good move since it allows you to evaluate how much money can be used for paying rent with student loans.
Before signing the papers or the loan, make sure that your education loan covers aspects other than your tuition fee, such as paying rent with student loans, utilities etc.
Is living off-campus a better option?
Sharing isn’t always caring. If you don’t like sharing your personal space with anybody, living off-campus by opting to rent an apartment will be a better option for you. Living in on-campus dorms can become expensive and tend to burn larger holes in your pockets. (Ripped jeans are trendy, but ripped pockets are not).
Living off-campus will also help you with your intra-personal growth, where you will learn to live independently and create a better environment for yourself. It can help you learn to get out of your comfort zone, as university residency dorms create a protective bubble.
Studying and living in the same place can become monotonous and mundane. By opting to rent an apartment off-campus, you also become the king of your life. You can also choose to have a roommate or not. And, since paying rent with student loans is possible, living off-campus becomes easy.
How to use Student Loans to rent an apartment?
Phew! Now we know that paying rent with student loans is possible, let us see how we can use our education loan to rent an apartment.
Apply for a student loan
To use your education loan for renting an apartment, the first thing to do is to apply for college loans, obviously. If you want a federal-backed student, you will have to fill up a free application for student aid form with personal details such as your family’s monthly income and your desired school’s details. Where to do this, you ask? Go to your school’s financial aid office, and they will give you the said form for college loan.
Review the Loan
After receiving the loan award letter, carefully read everything. Choose the loans that will cover your living and educational expenses. Make sure the loan fully covers your apartment rent and related expenses.
Now that you are apartment hunting, you can ask your friends and family if they know of any apartment that might suit you. You can read about them in classified ads in your local newspaper, or you can drive around to see if there are any excellent apartments around.
Fill out the Rental Application
After that, you can go to the leasing office and fill out your rental application. You will then fill out the necessary details that they need. Also, make sure to let them know that you will be using your education loan to pay for the apartment. This is important because if you didn’t provide them with this information, and when they find out later, you might be denied.
Sign and Deposit
Finally, you can sign the necessary documents and pay for the deposit that the leasing office needs. Always make sure to pay for the monthly rental payments so as not to incur additional fees. If required, you can put your living expenses in a different bank account to make sure you won’t spend it on something else.
Tips and Tricks to rent an apartment using student loans
Sorry to bring you back to reality, but an student loan is not free money. You do have to pay back the loan with interest. So you need to manage your student finances wisely. Here are some tips from someone who is not that scared of numbers. (oops! Who are we kidding?) But, honestly, these tips might also help you in the long run.
- Again, make sure that paying rent with student loans is possible and covers other expenses and living expenditures.
- Spend your loan money wisely. You need to budget your monthly finances smartly and efficiently.
- We know that when the bank account is heavy, we don’t feel like working. But getting a part-time job will be helpful in the long run if you don’t want to feel FOMO with your friends during the semester's end.
- You can put your loan in a different bank account so that you don’t end up spending it for miscellaneous expenditures. If you are a student in Australia, you can check out our blog to learn how to open a bank account in Australia.
- Take time to understand the lease time for your apartment.
Alternatives for paying rent with student loans
Well, there could be many reasons why paying rent with student loans won’t be possible for you. For instance, maybe your loan might not cover it, or you haven’t opted for a student loan. Don’t worry, we have alternatives for paying rent with student loans.
- Work-study programs
- Part-time jobs
- Income Share agreements
- Employer sponsorships
Viola! The only thing now left to do is shift into your apartment and make it a home away from home. Using a student loan to rent an apartment can be a great way to help ease the financial burden of starting a new life away from home. We hope this blog helped you with all the necessary information.