Need a student loan for your apartment rent? | 06.11.10
One of the better aspects of private student loans is their versatility and flexibility for paying school expenses. Of these costs, apartment rent is considered an acceptable piece of your total cost of attendance and thus you can borrow money to cover it.
In many cases, renting an apartment for a full year is cheaper than paying room and board for only 8-9 months of the year at your school. If you choose to become roommates with friends, the savings can grow even bigger. For the sake of illustration, during my time at Suffolk University in Boston, I paid $550 a month for rent and the dorms cost $1,400 a month not including meal plan. Kind of crazy, right?
If this makes sense to you and your financial situation, let’s break down the costs so you can have an accurate picture of how much money you need to take out in a loan.
Apartment: This can vary quite a bit depending on area. For the sake of example, let’s say $550 a month.
Utilities: This also can be quite different depending on the time of year, your climate, the set up of the house/building. Let’s say $120 a month.
Renters Insurance: Roughly $25 per month. (It’s a must, honestly.)
Food / Groceries: Conservatively, $60 a week or $258 a month. You could probably spend less, but why make your life miserable when it’s only a little more per month?
Unforeseen Expenses: $50 a month. You never know… weird stuff happens in life. If it isn’t used, you can apply it to the next month.
Using this formula….
550 + 120 + 25 + 258 + 50 = $1,003 a month
Sounds like a lot, but it’s actually a good deal less than you would be paying if you lived in the dorms and it INCLUDES food.
Comparison with Suffolk University Figures
1,450/mo [room & board] + 325/mo [meal plan] = $1,775 mo [in dorms]
550/mo [rent] + 120/mo [utilities] + 25/mo [insurance] + 258 [food] + 50 [incidentals]= $1,003 a month [renting]
Right away, that is a 43% savings. Compute it over the course of an 8 month academic year…. you’re saving somewhere in the realm of $6,200.
So based on the sample apartment, you’d need to take out about $8,000 in a private loan to cover your non-tuition expenses.
Go ahead and plug these numbers in for your school, what did you get?
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