*Article contributed by Ethan Clark.

Loans are helpful in times of emergency or need. Various emergencies that require some financial aid may arise. They may come about when you have not a single cent in your pocket. This is when borrowing is helpful. There are other times you will need some money to sustain you. You might be a student who is unemployed and needs money to take you through a specific period in college or pay your fees. There are special loans meant for this.

A student loan is meant to help needy students pay their college fees. If you can pay using your available money, then it is not advisable to apply for this type of loan. It is classified as a good debt in a way because you are using it for an investment – which is education. You will be required to pay it back after finishing college. Just like any other loan, student loans also have interest rates. These may increase if you fail to repay within the agreed period. This will also affect your credit score.

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