Short term loans for students

If you’re studying and have found yourself in urgent need of funds, you might have wondered about your chances of getting a short-term loan for students.

Can I get a short-term loan as a student?

Before you begin researching short-term loans, you may want to check other sources that could be available to you; for example, your university may have a financial advisor who might be able to offer you some support. Some universities also have hardship funds – it might be a good idea to contact your Student Support department and ask if this is something they provide.

It might be possible for you to be eligible for a short-term loan for students, but this will depend on your financial circumstances and the lender you apply with.

Some lenders specify that they will not consider applications from students who are not in employment alongside their studies; others may have a minimum income criteria.

When assessing your application, lenders like to see evidence that you’ll be able to comfortably afford to make your repayments throughout the duration of the loan.

I want to apply for a short-term loan for students; how much money could I borrow?

The amount of money you’re able to borrow will depend on several factors, including:

• The lender.
• Your employment status.
• Your income.
• Your affordability.

Growing Power is a credit broker, and the lenders we work with offer short-term loans between the value of £100 and £10,000, with repayment terms from 3 to 60 months.

Could I search for a short-term loan for students with Growing Power?

In order to search for a loan with Growing Power, you’ll need to:

• Be over the age of 18;
• Be a UK resident with a UK address;
• Have a UK bank account with a valid debit card; and
• Have a regular source of income paid into your bank account.

Growing Power is a credit broker, not a lender.

If our soft search reveals that you’ve been matched with a lender and you choose to make a full application, you’ll be required to undergo an affordability check. This will include either a hard search or Open Banking. A hard search will remain on your credit file for up to 12 months and multiple hard searches within a short period of time will negatively affect your credit score.

Please be aware that being matched with a loan doesn’t mean that you’ll automatically be approved by the lender – you will still need to pass an affordability check.

Will a short-term loan for students affect my credit score?

Yes. Any type of loan will affect your credit score.

It’s very important to make your repayments in full and on time each month. If you repay your loan within your selected term, there’s a chance that you could see an improvement in your credit score. For this to happen, you’ll also need to make sure that any bills or existing credit commitments are repaid on time.

We’ll explore some ways to boost your credit score further down the page.

If you make a late repayment or miss one altogether, your credit score will suffer. This will have a knock-on effect should you need to apply for credit, such as a mortgage or credit card, in the future.

I’m a student and I have no credit history at all; why is this?

Having no credit history is often referred to as having a ‘thin’ credit file and is very common amongst young people. If you’ve never paid bills or borrowed credit before, you’re likely to have a thin credit file. While this isn’t a bad thing, it could negatively affect your chances of being approved for credit. This is because, with no history of past credit management, lenders have very little information on which to base their lending decision.

Getting a loan with a thin credit file could be difficult, although some lenders specialise in loans for people with no credit history and could be willing to consider your application.

Rather than relying on your credit score to make their lending decision, they may use Open Banking.

What’s Open Banking?

Open Banking is a safe and secure procedure used by authorised third parties, such as lenders.

Here’s how it works:

1. You give consent for your chosen lender to access your online bank account. Only you can decide who accesses your account and you can withdraw your consent at any time.
2. With a read-only view, the lender will look at your recent financial activity, including your spending and repayment habits.
3. This provides them with an up-to-date insight into your situation.

How can I improve my credit score as a student?

Whether you’re hoping to build your credit score as a student or recover from bad credit, our tips could help you take steps towards a healthier credit position, starting today.

• Have you registered to vote? Signing up to the electoral roll could help to boost your score.
• Familiarise yourself with your credit report and get into a habit of checking it regularly. If you spot any incorrect or outdated information, report this to the credit reference agency as soon as you can.
• If you have monthly bills to cover, make sure these are paid on time. This could include your contracted mobile phone bill.
• Keep your credit applications to a minimum. When you apply for credit with a direct lender, they will complete an affordability check, which may include a hard search. Undergoing multiple hard searches within a short period of time will cause your credit score to decline. You could reduce the risk of numerous hard searches by applying via a credit broker instead.

Credit cards for students and the impact on your credit score

If you have a student credit card, you might be interested to learn how this could affect your credit score.

• Be sure to stay well within your credit limit.
• Aim to keep your credit card utilisation as low as possible.
• Avoid using your credit card to withdraw money from a cash machine.
• Do you have thin credit history? You might wish to do some research into a credit builder credit card. When used responsibly alongside other credit building methods, such as those mentioned above, you could see an improvement in your credit score.

Credit card glossary

Worried about money? Help is available

University can be stressful enough without adding money worries into the mix.

In addition to this, please know that you can access free, confidential financial advice from the following organisations: StepChange, MoneyHelper, Citizens Advice, and National Debtline.