The Pros And Cons Of Having A Short-Term Loan As A Student

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Many students have to keep up with their studies while also worrying about tuition fees, food, accommodation, and other expenses. Consequently, it is very common for students to get loans over a short time to supplement their student funding. These loans provide fast cash that can be used to pay for the many costs that come with being in college, making school life a bit easier. Still, they do have their merits and shortcomings, which we review in detail below.


As a student, you can benefit from a short-term loan in the following ways:

1. You Can Afford College

Getting through college is no walk in the park, especially if your student funding does not cover all your expenses. You constantly have to make ends meet, and this requires having access to cash. Since you cannot work full time and earn a salary, a short-term loan becomes an effective solution.

Short-term loans can help you resolve late rent payments and overdue tuition fees. By doing this, they ensure you don’t get kicked out of your home and can sit for your exams on time. Simply put, short-term loans make sure you can afford college.

Pro Tip: Always prioritize the needs that qualify for a loan. Avoid borrowing money for parties or clothes, especially if you don’t have a part-time job.

2. You Can Maintain Your Financial Freedom Upon Graduating

The benefits of short-term loans extend beyond school. Compared to traditional student loans, this form of financing allows you to maintain your financial freedom after graduation. This is thanks to the fact that short-term loans have a short repayment period – usually one to two years – and won’t follow you for years after you leave school. The implication is that whatever salary you earn upon graduating will go straight into your pockets, not into repaying your loans.

3. You Can Join Your Dream School

We would all like to believe that all colleges are the same, but the truth is, some schools are ranked higher than others and would probably give you an edge in the job market. The downside to this is that these schools also tend to charge higher tuition fees than their counterparts. So, if you wish to join your dream school, you may need to consider extra funding.

From your student loans, you might be able to afford tuition fees and not much more. A short-term loan can help you meet other expenses like accommodation, books, and transport.

4. The Uses Are Varied

Arguably the sweetest deal you get with short-term loans is that they are not earmarked for specific expenses. You can use them to pay for tuition, room and board, food, transport, books, lab fees, and the like. This means that you even have room to explore other interests out of school, like art or music.


Like most things in life, short-term loans for students can have their downfalls. Some include:

1. Short-Term Loans Can Be Expensive

Short-term loans are processed fairly quickly and don’t usually involve a rigorous application process – but there is a catch. In most cases, you have to repay them within a short time. Depending on the borrowed amount, this might mean expensive monthly repayments that will significantly impact your financial status. Your only saving grace would be to get a job, which leads us to the next point.

2. You Will Need to Work While Studying

To pay off your short-term loan, you will likely have to get a part-time job. This sounds easy and fun until you have to pull double shifts or be at work early on a day you also have tests. The strain could bleed into your academics and physical and emotional health. Additionally, it will not help that a significant chunk of your pay will be dedicated to repaying your loans, not paying your bills.

3. Defaulting Can Tank Your Credit Score

It is easy to forget that short-term loans are still funding that must be repaid. If you default on it, you will lower your credit score and could leave college with bad credit. Bad credit means you will have trouble getting funding or renting an apartment – generally a lousy way to begin adult life.

4. You May Have to Put Other Life Goals on Pause

As you pay off your loan and cover your college expenses, you will not have much left in the way of savings and spending money. This means that you will be forced to put your long-term financial goals on hold until you finish making repayments. Of course, this is only a problem if you let your loan follow you after you graduate college.


Short-term loans are a welcome relief for many students from the financial demand of college. If you are running late on rent or school payments, they can help you make ends meet and stay in school. Nonetheless, a loan is no less risky simply because you are a student, and you must carefully weigh the pros and cons before applying for one.



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