If you have recently finished university, getting started in the 'real world' can be tough if you don't have the funds to start on your chosen career path. If you have dreams but don't have the cash to follow them, then you should look at getting a graduate loan to help you out whilst you find your feet. Here are some hints and tips about how to go about getting a graduate loan and how such a loan could help you.
What are graduate loans?
In essence, graduate loans are just a form of unsecured personal loans. They are for people who have recently finished university and want to get ahead in their career or for any other purpose. Graduate loans usually consist of a lump sum of around £1000 to £25,000 and are repayable over six months to ten years.
What are the advantages?
Although graduate loans are basically unsecured personal loans, because they are for people starting out in their careers, lenders often offer better rates. The interest rate will be lower than regular personal loans, and the amount you can borrow will usually be greater than you could normally secure. However, graduate loans are still based upon your credit rating and so rates may vary depending on your status and current income.
Another advantage of graduate loans is that they sometimes offer deferred payment options, both at the start and at various points throughout the loan. This means you can delay your payments for a number of months in order to get your finances in order. Of course, doing this still means you will be charged interest, and so will end up paying back more. However, it can be useful if money is tight or you want time to sort things out before you begin repaying the loan.
Charges and costs
Although typical APRs are low, there are other charges to consider when taking out a graduate loan. For instance, missing payments can be expensive with late fees of anything up to £40 for a missed payment. Also, if you want the money within 24 hours of applying you might have to pay a fee of around £50 or more for the privilege. However, graduate loan charges are fairly similar to those of any other personal loan. Just make sure that you read the terms and conditions before applying.
What can I use the loan for?
What you use the loan for is up to you, but usually graduate loans are used to pay off credit card debts from university and to help start you off in your chosen career. This might be to buy the right smart clothes for your job, or to pay to move to a new city, or for travel expenses. Getting everything you need to start your career can be expensive, especially if you already are short of cash because of university debt. Getting a graduate loan will help you to sort out your finances and put you in a position to get what you need to move up in the world.
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Peter Kenny is a writer for thriftyscot.co.uk Please visit us at Loans and Graduate Loans
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