College students who have taken out student loans to cover tuition might need another type of financing to help cover miscellaneous expenses – or any emergencies that might come up. Instead of maxing out their credit cards, students might consider personal loans for non-college-related costs.
Personal loans usually have lower interest rates than credit cards, and that’s not the only positive they offer. Read on to learn more.
Best Personal Loans for Students
|
|||||
|
|||||
|
|||||
|
|||||
|
|||||
|
|||||
|
|||||
|
|||||
|
|||||
|
|||||
|
|||||
|
|
|||||
|
|||||
|
|||||
|
|||||
|
|||||
|
|||||
|
|||||
|
|||||
|
|||||
|
|||||
|
|||||
|
|
Lender |
Learn More |
APR |
Max. Loan Amount |
Min. Credit Score |
|---|---|---|---|---|
 |
2.49% to 19.99% | $100,000 | 660 | |
 |
6.49% to 17.99% | $20,000 | Not disclosed | |
 |
7.24% to 25.34% | $35,000 | Not Disclosed | |
 |
8.69% to 35.99% | $50,000 | 620 | |
 |
5.99% to 24.99% | $40,000 | 640 | |
 |
7.16% to 29.99% | $45,000 | Not disclosed | |
 |
9.95% to 35.95% | $35,000 | 550 | |
 |
6.99% to 19.99% | $40,000 | 660 | |
 |
5.99% to 18.28% | $100,000 | 680 | |
 |
4.99% to 29.99% | $50,000 | 640 | |
 |
10.68% to 35.89% | $40,000 | 600 | |
 |
5.99% to 29.99% | $25,000 | 600 | |
 |
7.99% to 35.97% | $50,000 | Not disclosed | |
 |
9.99% to 35.99% | $25,000 | 600 | |
 |
6.99% to 24.99% | $35,000 | 660 |
Before You Apply
- Minimum FICO credit score: 660
- Loan amounts: $5,000 to $100,000
- Repayment terms: 24 to 144 months
- Better Business Bureau rating: A+
Best Features
-
A variety of loan uses are available.
-
Loans of up to $100,000 are available.
Best for low minimum loan amounts
Before You Apply
- Minimum FICO credit score: undisclosed
- Loan amounts: $500 to $20,000
- Repayment terms: up to 60 months
- Better Business Bureau rating: A+
Best Features
-
Terms of up to 60 months.
-
There are no origination fees.
-
Borrowers can get access to funds as early as the day after approval.
Best for low fees and discounts
Before You Apply
- Minimum FICO credit score: undisclosed
- Loan amounts: $1,000 to $35,000
- Repayment terms: 6 to 60 months
- Better Business Bureau rating: A+
Best Features
-
A range of loan amounts and repayment terms.
-
No prepayment penalty and no origination or application fee.
-
Get a 0.25-percentage-point discount if you set up autopay using a PNC checking account.
Best for borrowers with no credit or poor credit
Before You Apply
- Minimum FICO credit score: 620
- Loan amounts: $1,000 to $50,000
- Repayment terms: 36 to 60 months
- Better Business Bureau rating: A+
Best Features
-
Upstart may accept applicants with fair credit or even those with no credit history, using artificial intelligence to quantify risk.
-
Upstart loans as low as $1,000 are available in most states.
-
The lender’s credit dashboard allows borrowers to see the impact of loan repayments and to modify payment dates.
Payoff is not a bank; instead, it works with lending partners that originate loans. The company, which considers itself a financial wellness firm, is based in California.
In 2017, Payoff launched a sister company called Happy Money, which takes a psychological approach to money matters. Today, Payoff is a service under the Happy Money umbrella.
Before You Apply
- Minimum FICO credit score: 640
- Loan amounts: $5,000 to $40,000
- Repayment terms: 24 to 60 months
- Better Business Bureau rating: A+
Best Features
-
Borrowers don’t face prepayment or late fees.
-
Borrowers can get preapproved with no hard credit check.
-
Some borrowers with fair credit may be eligible.
Best for digital customer care
Before You Apply
- Minimum FICO credit score: undisclosed
- Loan amounts: $2,000 to $45,000
- Repayment terms: 36 to 60 months
- Better Business Bureau rating: A+
Best Features
-
Same-day loan funding is available in some cases.
-
No prepayment penalties apply.
-
An online application process is available.
Before You Apply
- Minimum FICO credit score: 550
- Loan amounts: $2,000 to $35,000
- Repayment terms: 24 to 60 months
- Better Business Bureau rating: A
Best Features
-
Loans as low as $2,000 are available.
-
Funding can happen as early as the next business day after approval.
Before You Apply
- Minimum FICO credit score: 660
- Loan amounts: $3,500 to $40,000
- Repayment terms: 36 to 72 months
- Better Business Bureau rating: A+
Best Features
-
Marcus does not charge any fees on its personal loans.
-
Borrowers can adjust their payment due date.
Best for loans of up to $100,000 with no fees
Before You Apply
- Minimum FICO credit score: 680
- Loan amounts: $5,000 to $100,000
- Repayment terms: 24 to 84 months
- Better Business Bureau rating: A
Best Features
-
SoFi offers no-fee loans, including no late fees.
-
Loans of up to $100,000 are available.
-
Co-borrowers are accepted.
Before You Apply
- Minimum FICO credit score: 640
- Loan amounts: $2,000 to $50,000
- Repayment terms: 36 to 60 months
- Better Business Bureau rating: A+
Best Features
-
Loan funding typically takes one to three business days upon approval.
-
The minimum loan amount is $2,000 in most states.
-
Borrowers incur no prepayment penalty.
What Is the Best Interest Rate on a Personal Loan?
When you shop around for the best personal loan interest rate, you can save. Compare your personal loan offers with national average trends for personal loans to know whether you’ve found a good deal.
*Rate as of May. 21, 2021
Personal Loan Finder
Select your desired loan amount and loan purpose, your credit score range, and your state to see estimated annual percentage rates and loan terms.
How Do Personal Loans for Students Work?
When you obtain a personal loan – whether from a bank, credit union or online lender – you usually get the money upfront and pay in monthly installments for as long as seven years. Personal loans can total as much as $100,000, but the amount allowed depends on your debt-to-income ratio and overall creditworthiness.
Personal loans can be used for a variety of reasons, ranging from home repairs to a vacation trip. A college student might use it to cover an emergency expense, like a car repair. A personal loan might be ideal because approval happens quickly and you’ll receive the money within a day or two.
Since the loan payments will need to start right away and the payment period is likely to last a few years, “be diligent about paying that off as scheduled,” says Justin Nichols, co-founder and managing principal for advisor services of Garrett Investment Advisors in Manhattan, Kansas. “Ideally, if you have to get a personal loan, next semester try to position your schedule so you can get a part-time job and aggressively pay off the personal loan ahead of schedule.”
Personal loans are not usually used to pay for direct college expenses like tuition because many lenders will not allow them to go toward postsecondary education. Most students also realize that student loans – whether federal or private – are likely to have more advantageous terms than a personal loan.
What Are the Different Types of Personal Loans for Students?
There are two primary types of personal loans – secured and unsecured. To get approved for a personal loan, you’ll need to rely on your creditworthiness to get an unsecured loan, or collateral – such as a vehicle or securities – to obtain a secured loan. Secured loans usually have a lower interest rate because the collateral decreases the risk for the lender in case you can’t pay off the loan. Personal loans typically have fixed interest rates for the life of the loan.
Unsecured Personal Loans
As a full-time student, it might be difficult to get approved for an unsecured personal loan on your own because you likely don’t have enough income or a strong credit score. Fortunately, there are loans designed for people with bad credit.
If you apply for a loan, a lender will want to know how you will pay it back. “Where is this magical money going to come from if you don’t have a job and you’re in school?” says Tiffany Aliche, founder of The Budgetnista and author of “Get Good With Money.”
When you apply for a personal loan, pay attention to the interest rate you’re offered. It could be in the single digits if you have a strong credit score, or be as high as 35%, which would likely be significantly higher than your credit card’s rate.
Secured Personal Loans
You might not have a lot of assets that would be valuable enough to serve as collateral on a personal loan, but a vehicle – especially if it’s fairly new – could be one.
“The bank naturally should be more comfortable because there is a tangible asset that is acting as security for that loan,” Nichols says.
But if you can’t pay back the loan, you could lose your car.
That’s why an unsecured loan is “a more desirable loan for a borrower because if you can’t pay, the assets you have aren’t at risk of being taken right away,” Aliche says.
Who Qualifies for Personal Loans for Students?
The minimum credit score necessary to get a loan varies by lender – it can be anywhere between 550 and 720. You’ll also need proof of consistent income. Remember that the higher your credit score, the better the interest rate you’ll get. To improve your chances of getting approved on your own, you could look for ways to quickly improve your credit score.
You could also apply with a co-signer, such as a family member or friend, who could make your application more appealing to the lender. If the co-signer has a consistent income, low debt-to-income ratio and a strong credit record, it should dramatically increase your chances for approval.
You’ll need to let the prospective co-signer know that you’re “putting them in a position that if you don’t pay, they are equally as responsible,” Aliche says. Your co-signer’s credit report will also reflect this new debt and possibly affect the person’s ability to buy a home or car.
Just bringing up the idea of a loan co-signer with a friend or family member could start a conversation that leads to that person lending you the money directly, Nichols says.
Should You Get a Personal Loan for College?
Personal Loan Benefits
- Better interest rate than credit cards: There’s no guarantee your interest rate will be in the single digits or low double digits – which would likely be lower than your credit card rates – but if it is, you could save hundreds of dollars over the life of the loan. “The interest rate on a personal loan should be more reasonable than racking up any credit card debt,” Nichols says.
- Immediate solution to a crisis: If you need money right away to deal with an expense that could dramatically affect your daily life and safety – such as urgent home or auto repairs or a medical emergency – a personal loan can quickly provide the funds you need.
- Expected payoff with future earnings: If you expect to start a full-time position within several months that will provide you with adequate income, the personal loan might come at the right time for your financial situation.
- Head start to financial responsibility: If you get approved with a co-signer, it could improve your credit history and score and be a first step toward learning to pay for your expenses as you get the income to pay for them.
Personal Loan Drawbacks
- Immediate payments: Unlike student loans, which let you defer your payments until after you graduate, payments for personal loans start within a month of loan approval.
- Higher interest rates: If you’re used to the low interest rates on student loans – especially federal loans – the rates for personal loans will likely be a shock. If your creditworthiness is not strong, you could end up paying rates that are similar to ones for credit cards.
- Losing assets: If you obtain a secured personal loan and can’t pay back the loan, you could lose the item – such as a vehicle – you used to secure the loan.
- Building debt: Student loans are already a huge debt burden for many people. If you add a personal loan, it will make starting out on your own even harder. “You literally start your adult life in a hole,” Aliche says. “The closer you can start your adult life at the start line, the better.” Instead, try to find other ways to address your debt, such as grants or scholarships through your school. “Go to the financial aid office regularly and make yourself known,” Aliche says. You could also decide to take fewer classes and find a job that offers more hours to pay down your debts.
What Other Types of Loans Are Best for College Students?
- Federal student loans: The best loan options for most students are federal student loans, which have fixed interest rates that are usually lower than private student loans. They also might be subsidized, which means the student does not pay interest while in school, and offer forbearance and deferment options.
- Private student loans: Although terms for these loans aren’t usually as advantageous as federal loans and you’ll likely need a co-signer, private student loans are a good second-choice option. The opportunity for payment deferment during school is an advantage over personal loans.
- Family loans: If you can reach an arrangement that works for both you and your relative, a family loan might save money in interest rates and provide a safety net if you run into trouble making payments.
View More Best Personal Loans for Students
Before You Apply
- Minimum FICO credit score: 600
- Loan amounts: $1,000 to $40,000
- Repayment terms: 36 to 60 months
- Better Business Bureau rating: not rated
Best Features
-
Loans of $1,000 or more are available.
-
Joint applications are accepted.
-
Borrowers can qualify with fair to excellent credit.
Best for peer-to-peer loans of up to $25,000
Before You Apply
- Minimum FICO credit score: 600
- Loan amounts: $4,000 to $25,000
- Repayment terms: undisclosed
- Better Business Bureau rating: A
Best Features
-
Some borrowers with fair credit may qualify.
-
Borrowers can complete the entire loan process online.
Best for loan amounts of up to $50,000
Lender Highlights
- Minimum FICO credit score: Not disclosed
- Loan amounts: $1,000 to $50,000
- Repayment terms: 36 to 60 months
- Better Business Bureau rating: A+
Best Features
-
Loans and lines of credit are available up to $50,000.
-
Borrowers can complete the entire loan process online.
Best for FICO scores between 580 and 669
Before You Apply
- Minimum FICO credit score: 600
- Loan amounts: $2,000 to $25,000
- Repayment terms: 24 to 48 months
- Better Business Bureau rating: A+
Best Features
-
Loan funds are available as soon as one day after approval.
-
Borrowers with fair credit may qualify.
Before You Apply
- Minimum FICO credit score: 660
- Loan amounts: $2,500 to $35,000
- Repayment terms: 36 to 84 months
- Better Business Bureau rating: A+
Best Features
-
Discover has no fees other than a late fee.
-
Customizable loan terms from 36 to 84 months.
-
Borrowers get free access to their FICO credit score.
Advertising Disclosure: Some of the loan offers on this site are from companies
who are advertising clients of U.S. News. Advertising considerations may impact
where offers appear on the site but do not affect any editorial decisions,
such as which loan products we write about and how we evaluate them. This site
does not include all loan companies or all loan offers available in the marketplace.
More News
Barclays Mastercard Gold Card Review
Gold Delta SkyMiles Credit Card from American Express vs. The Platinum Card from American Express: Which is Best?
The Business Platinum Card from American Express vs. The Platinum Card from American Express: Which Is Best?