How to Use College Loans to Rent an Apartment

College loans don't just pay for tuition and books. They also help to cover living expenses associated with college, including renting an apartment. Depending upon the specific type of student loan you get, the funds might be directly disbursed to you or the money might go to the school, which will then give you the money, minus tuition costs. You can then use this money to pay for an apartment.

  1. Apply for a student loan. If you're seeking a federally-backed student loan, you'll need to fill out a Free Application for Student Aid form and provide information about your income and the school you're attending. You can often do this through your school's financial aid office. You can also apply for a private student loan directly through your bank, though these loans often carry higher interest rates and you might have to make payments while you're still in school.

  2. Review your loan award letter when you receive it to determine which loans you are eligible for. Select loans that will pay for tuition plus living expenses and sign for these loans. Wait for the funds to be disbursed before you begin apartment hunting. You should ensure that the loan you select is enough to cover the entire length of an apartment lease plus any utility payments or living expenses you'll be paying.

  3. Search for an apartment by talking to friends about their apartments, reading local classifieds or driving around looking for apartments. Go to the leasing office and fill out a rental application. You might have to provide references as well as financial information. Ensure that the leasing office knows that you have a student loan that will be covering your expenses. Because many students don't work, if the office does not know about the loan you might be denied.

  4. Sign the lease agreement and pay any deposits you're required to pay for your apartment. Make your monthly rental payments by the due date each month to avoid rental fees. It can be helpful to put your loan money in a separate bank account so that you don't accidentally use it for other expenses and run out of money to pay for your apartment.

  5. Warning

    While a college loan might feel like free money now, you'll have to repay the money plus interest when you graduate. Don't take out huge loans, and avoid using your college loan to finance an expensive lifestyle.