Education Personal Loans For Students

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Tertiary study can be a stressful time for all students, and having the right equipment and access to the course materials can make all the difference to the end result of those years spent studying for a future career.

Education loans for students can be used to finance many study-related costs, so students are able to focus on learning and achieving their potential instead of slaving away at a minimum-wage job just to survive the semester.

Here’s everything you need to know about education personal loans for students in New Zealand and how to finance important study-related costs.

How do personal loans for students work?

Personal loans for students work much the same way as standard personal loans. The main difference is that personal loans for students have relaxed approval criteria to reflect the working and financial situation many tertiary-level students will be in.

The majority of students will commit their full-time working hours to study, with many taking up short-term or part-time jobs to make ends meet or just have a small amount of disposable income. Personal loans for tertiary students account for this by relaxing the approval criteria around income, collateral, and job stability.

As a result, most personal loans available for education purposes have relatively low borrowing limits, shorter terms, and may provide less flexibility around repayments. The bonus for students is that the majority of these loans either have low or no upfront fees.

An education loan for students can be used to purchase various essentials to assist with tertiary study. These are five of the most common reasons:

Laptops
Vehicles
Course books
Apprenticeship tools
Rent or accommodation expenses

It’s important to remember that personal loans for students are still personal loans. While they can be a perfectly adequate form of finance to fund study-related essential costs and an opportunity to build an individual’s credit score early on in their adult lives, they should be applied for without genuine consideration to how the money will be used.

You can qualify for a personal education loan in New Zealand if you are:

18 years or over
Enrolled to study within New Zealand
Can demonstrate an ability to repay the borrowed amount over the term
A permanent NZ resident or hold a visa allowing you to reside in New Zealand

If you meet the standard qualifying criteria for a student personal loan, you can calculate how much you can borrow and compare lenders to find the best loan offers available in New Zealand before applying for a loan.

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Types of personal loans for students

Secured personal loans

A secured loan requires you to provide an asset (e.g. a vehicle) as security on the loan amount in return for higher borrowing amounts and better rates. As many students do not own any assets, it’s common for parents to act as a guarantor on the loan and provide one of their own assets as security on the behalf of their child.

Unsecured personal loans

An unsecured loan does not require an asset to be used as security, and usually comes with higher rates, but is generally more flexible and can be used for any legitimate reason.

Short-term loans

Most student personal loans will have shorter terms, but specific short-term loan products can include payday or cash advance loans. These are generally not ongoing finance solutions and may be used by mature students, students receiving government benefits, unemployed students or those with very limited income.

Car loans

Vehicle loans (generally a car but also a motorbike or scooter) are a specific type of secured loan used to finance only the purchase price of a vehicle, which will then be used as security over the amount. Car loans have restrictions on how you can use the funds but generally come with more competitive rates and lower fees than unsecured finance.

Before you apply for a loan, check your eligibility for available student grants and student support payments from Work and Income:

Student Hardship Grants

Given to students struggling with essential expenses, hardship grants are offered by various higher learning institutions in New Zealand. Some universities provide one-off emergency funding to students, while others may provide ongoing support for students experiencing financial hardship. Contact the institution you are enrolled with to submit an application.

Work and Income NZ Support

One-off and ongoing support payments are often available through WINZ, even for students who may already be receiving student allowance payments. These payments can be used to cover medical expenses if a student has an ongoing condition that affects their study, but can also include support payments to help with unexpected emergencies that may cause ongoing financial difficulties.

Check if you qualify