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Financial companies use the term “personal starter loan” to describe a variety of different financial products. So, depending on the company you choose, your loan could be for as little as $500 or all the way up to $25,000. One thing unites all these different types of loans: They are generally for expenses involved with starting your life after you’ve finished school. And they usually have lower-than-average interest rates.
Since they’re geared toward those starting out, starter loans usually don’t require the borrower to have a long credit history. The loans can be a great opportunity to build up your credit score, as long as you pay the loan back on time. Of course, this loan isn’t meant for everyone. Let’s look at a few reasons where it makes sense to use a personal starter loan, as well as a few situations where you’d be better off not using the loan.
Before you start the next phase of your life, it can help to have some money to pay for life’s expenses. Here’s where it’s smart to use a personal starter loan:
Some soon-to-graduate students are tempted by a personal starter loan for all of the wrong reasons. They see the $25,000 as a lucky windfall or unexpected fortune that has fallen into their lap. A loan should never be thought of as free money, even if it comes with a low interest rate. There are a few situations where it does not make sense to use a personal starter loan, or really a loan of any type:
If you’re interested in a personal starter loan, there are many options available to you. If you’re still in school, we recommend contacting your school’s financial aid office and asking to speak with a counselor. They are there to help guide you. For those of you who have already graduated, check your local credit unions and see if they offer a starter loan. You could also fill our loan request form. Currently, we don’t specialize in matching people with this type of financial product.