Learning financial responsibility is a significant component of the college and university experience for many students. One way you can help post-secondary students gain their own financial footing without taking on too much risk is by encouraging them to apply for a student line of credit.
How a student line of credit works
Student lines of credit are offered by financial institutions to help fill in the gap left by student loans and other financing. Between tuition, housing, textbooks and other associated costs, post-secondary education ends up being expensive. While RESPs, student loans and grants can help cover much of this, there is still plenty to pay for.
Rather than students getting a credit card, they can establish financial independence and a sense of fiscal responsibility with a student line of credit. Opened in their name and with limited credit, this line of credit can help students learn the importance of tracking spending and making payments on time. Plus, following graduation, the line of credit is no longer available, so they can't continue to rely on it like they might a credit card.
Student line of credit features
Student lines of credit are specially designed to work for students, making them a better option than personal lines of credit or credit cards. Since students have limited income in school and will start out at their jobs with lower salaries, this type of credit line is designed to work within these parameters and still provide benefits like:
- Low interest rates
- Interest-only payments during school and during the grace period following graduation
- Boosting the student's credit score so long as payments are made on time
- Repayment plans that can be tailored to the student's budget and timeline
Applying for the Education Line of Credit
Students can apply for the Education Line of Credit in minutes. Once approved, the credit line is available for the duration of the term so there's no need to reapply each school year. If you have further questions, contact a CIBC advisor at 1-866-525-8622.