The purpose of student loans is to help cover the cost of attending college, including tuition, room and board, books, supplies, transportation and other related costs.
However, student loans are not just limited to educational expenses; they can also be used to pay off credit card debt or fund savings and retirement accounts. Here are 10 types of expenses you can pay with a student loan.
Expenses You Can Cover with a Student Loan
If you have student loans, you might be wondering if they can help pay for your mortgage or rent. Well, the answer is yes! With student loans, you can use them to pay for expenses like your mortgage or rent and any other bills that need to be paid in full every month.
It is important to note, though, that this isn’t advisable as it will take longer for you to pay off your debt if you’re using it this way.
2) Auto loans
If you are looking for a way to consolidate your debt, an auto loan may be the right option for you. With an auto loan, you can consolidate your credit card and student loan debt into one monthly payment.
For example, if you owe $6,000 in student loans and have $3,000 on your credit card, it may make sense to get an auto loan with $9,000 total to pay off both debts while saving the money that would normally go towards paying down the credit card.
3) Major home repairs
Major home repairs can be expensive, but fortunately there are loan options to help. A Home Equity Line of Credit (HELOC) is one example, and it lets you borrow up to 80% of the equity in your home for repairs or renovations.
Your monthly payment will be determined by the amount you borrow, the interest rate on your mortgage, and the length of time before you need to repay it. What’s more, many HELOCs provide interest-only payments for up to 10 years!
4) Utilities (landline, Internet, TV)
A utility provider is an essential service for many people, but it can be hard to know how to keep up when your funds are low.
A student loan can come in handy, as you may be able to use the money towards your utility bills. The best part? Your monthly payment will be lower since you’ll have more money each month! One less worry on your plate and one less bill to pay.
Heating/Cooling: During these chilly winter months, keeping warm is a priority. However, it’s not always easy to figure out how you’re going to afford heating fuel or electricity this season.
One solution? A student loan could help if your expenses outweigh what you earn at work.
It is possible to use your student loan to cover groceries. Simply purchase the items you need and then submit your receipts as proof that you used the funds for groceries.
It is important to keep in mind, however, that if you do this, those funds will not be available for other expenses such as rent or utilities.
6) Cell phone service
If you’re looking for an easy way to take care of some monthly expenses, your student loan might be the answer. Cell phone service is one of the most expensive bills that you will have as a college student and can cost upwards of $100 per month.
If you have enough money on your credit card then it may be worth exploring other options, but if not then it’s worth looking into taking out a small loan to cover your cell phone bill.
7) Health care costs
Health care costs are one of the most expensive costs you’ll face in life. As such, it’s important to know that you can use your student loan for health care costs.
This is possible because the federal government doesn’t want people to be burdened by unaffordable medical bills, which is why they provide loans to cover these expenses.
Some students also opt to take out private loans as well, since they have more flexible terms and rates than federal loans.
Regardless of what option you choose, make sure that this decision is well-informed and carefully considered before signing on any dotted line.
This type of expense should not be taken lightly; once it’s gone, there’s no getting it back!
8) Car insurance
In order to get your car insured, you’ll need to present the company with your driver’s license and proof of insurance. Most companies will have you sign an application so they can get an idea for what kind of driving record you have.
You’ll also need to answer some basic questions about yourself and agree to their terms and conditions before they give you a quote. Keep in mind that the cost varies depending on where you live and how old your car is.
9) Parking fees (if you drive for Lyft or Uber)
Parking fees are one expense that you can cover with your student loan. As long as you have the option to pay through the app and not just cash out (which only happens at the end of your shift), then you can use your student loan funds to fill up on gas or pay for parking.
If you’re not working, but still need to make an errand trip in town, paying for parking is a no-brainer.
Bonus, Paying for public transportation:
Public transportation is another expense that students can easily pay with their student loan money if they’ve got it available in their account and don’t want to put themselves in credit card debt by charging every single ride taken during the semester.
10) School supplies
School supplies can be an overwhelming expense for parents and students, but luckily notebooks, pens, pencils , binders, calculators, paper – all these things can add up quickly.
But with the help of a few bucks from your student loan you can make sure you have all you need to be comfortable in school.