Types of student loan

Education loans, personal loans and student loans mean pretty much the same thing. But they're a rowdy bunch, with various options competing for your love. You'll have to choose between fixed or variable interest, and secured or unsecured loans.

• Fixed student loans
  
• Variable rate student loans
• Secured student loans
  
• Unsecured student loans

Then there's the likes of...

• Consolidated student loans
• Deferred repayment loans
• Student car loans
  

Fixed personal loans

Fixed interest loans give you a set rate for a period of your loan - typically five years or more - so you don't have to worry about changes in bank loan interest rates.

PROS:

• Repayments are fixed, so you can budget accurately for your bank loan.
• If interest rates rise, your personal loan rates will look like a bargain.
  

CONS:

• Fixed personal loan interest rates are typically higher than variable rates.
• If interest rates fall, your bank loan will look expensive.

Variable rate personal loans

Low student loans are usually variable interest — offering the best loan rates on the market.

PROS:

• Low rates, and if interest rates fall, so will the total cost of your student loan.
  

CONS:

• Repayments will rise if loan rates go up, making it difficult to budget for your bank loan.
  

Secured personal loans

Bank loans can be 'secured', meaning that you put up assets – such as your car or home (or your parents' home...) – against the loan.

PROS:

• Low interest rate loans, because lenders have less risk.

CONS:

• If you default on the secured student loan, your lender can sell the particular assets to recover any money owed.

Unsecured personal loans

Unsecured bank loans give you access to cash even if you don't have assets to guarantee the debt.

PROS:

• Unsecured student loans typically have lower interest rates than credit cards and many "buy now, pay later" financing deals.

CONS:

• Unsecured cash loans have a higher interest rate than secured loans, as they carry more risk for the lender.

Student loan consolidation

If you already have a loan - or, ahem, several loans - you can consolidate less attractive, high interest loans into the one, low rate loan account.

• Credit card interest rates can be 10% higher than personal loan rates.
• Repay debt faster and save on the total cost of your bank personal loan

Deferred repayment loans

Student loans can arrive with the heady option of borrowing money now, but delaying repayments for several years — until you've finished your studies and are out in the workforce.

• Student loan repayments should, in a perfect world, be delayed as long as possible. But these money today, no more to pay offers come at a cost: student loan interest is compounded from day one, getting bigger and meaner while you're not making payments.
  

Car loans

Student car loans are pretty much the same as a secured personal loan, as the car acts as collateral.

Too easy!

Now what about student loan fees and features?