Many private schools in Australia expect school fees to be paid upfront, either term by term or annually, and this can be a huge burden on families. In some cases, a personal loan could be an appropriate solution, but only if you have the financial means to pay back the loan on time.
Several banks and lenders offer personal loans to cover school fees, but the cost and terms can vary significantly, so it’s a good idea to carefully compare what’s on offer across Australia before signing up to a personal loan.
To find a personal loan that suits your financial needs the best, it’s important to compare the following things:
- Interest rates – are they fixed or variable?
- Fees – how much are the upfront and ongoing fees?
- Repayment options – can I make payments weekly, fortnightly, monthly, and can extra repayments be made without penalty?
- Features – is there a redraw facility and fully-drawn advance?
- Customer service – is it all online or can I also get customer service over the phone and at a branch?
RateCity.com.au has an easy-to-use comparison tool to compare dozens of loans from a wide range of Australian lenders, so you can find one that will best help you pay the school fees.
How much can I borrow for school fees?
Every lender in Australia sets its own limit on personal loans, but generally personal loans vary between about $1,000 and $100,000.
Your own financial situation will heavily determine how much a lender is willing to let you borrow in a personal loan for school fees.
How long will I have to pay back a student loan school fees?
The term of personal loans tend to range from one to 10 years. If you get a personal loan that allows early repayment, it might be a good idea to pay off the loan ahead of schedule, so you can pay less in interest.
RateCity’s comparison tool lets you change the term of the loan to see how that affects your interest charges on repayments.
How can I apply for a student loan for school fees?
Firstly, you need to make sure you are eligible. Each financial institution has its own list of criteria but generally you’ll need to prove the following five things:
- You are at least 18
- You an Australian resident or citizen
- You’re employed
- You receive a regular income into a bank account
- You have a fair credit history (although some lenders will accept a bad credit history)
Secondly, you will be required to provide the following:
- Mobile phone number and email address
- Driver’s license or Medicare Card or passport
- Three months’ worth of bank statements
Some lenders may also require additional documents and information.
If you are self-employed, you will also need to show your latest tax return for proof of income, but be aware that not all lenders offer personal loans to the self-employed.
If I have a bad credit history, can I still get a loan for school fees?
The short answer is yes.
There are a number of lenders who will give loans to customers with a bad credit history. However, usually you will be required to prove that you have a regular income deposited into a bank account, and that this is sufficient to repay the personal loan you are taking out for school fees.
