Should I Use a Personal Loan to Pay off My Student Loan Debt?

Our goal is to give you the tools and confidence you need to improve your finances. Although we receive compensation from our partner lenders, whom we will always identify, all opinions are our own. Credible Operations, Inc. NMLS # 1681276, is referred to here as "Credible."

If you’re determined to pay off your student loan debt as quickly as possible, you might be looking for creative solutions — like using a personal loan to pay off student loans.

Personal loans can give you quick access to cash, which could be helpful if you’re struggling with your student loans. You also might qualify for a low interest rate on a personal loan if you have good credit.

However, while using a personal loan to pay off student loan debt can seem like a good plan, it could be an unrealistic repayment strategy.

Here’s what you need to know before considering using a personal loan to pay off a student loan:

• Paying off student loans with a personal loan
• Advantages
• Disadvantages
• Additional loan repayment options
• Is using a personal loan to pay off student loan debt right for you?

Paying off student loans with a personal loan

Using a personal loan to pay off your student loans can be appealing. With many personal loan lenders, you can submit an application online, get an instant decision, and have money deposited into your bank account quickly.

But using a personal loan to repay your student loans usually isn’t a good idea. If you want to tackle your debt, student loan refinancing could be a better option.

With refinancing, you’ll likely get a lower interest rate than you would with a personal loan. Plus, refinancing also offers longer repayment terms compared to personal loans.

Learn More: How to Refinance Your Student Loans

Advantages

Taking out a personal loan to pay off student loans could be risky, but there are also some benefits to this approach:

• Personal loans are usually processed quickly: With student loan refinancing, it can take several days or even weeks for your existing loans to be paid off. Personal loan funds are typically disbursed much more quickly. After your loan is approved, you might get your money in as little as one business day, depending on the lender.
• You might qualify even if you didn’t finish college: Although some lenders will refinance student loans if you didn’t finish college, many require you to have graduated to qualify for refinancing. Personal loan lenders don’t have this requirement.
• You could release a cosigner from your student loan: If you use a personal loan to pay off a student loan, your student loan account will be closed. If you had a cosigner on your student loan, they’ll be released from the account.
• Personal loans can be discharged in bankruptcy: Student loans are notoriously difficult to discharge in bankruptcy. Personal loans, on the other hand, aren’t subject to the same restrictions as student loans. This makes them easier to discharge if you have to declare bankruptcy later on.

Learn More: Refinancing Your Federal Student Loans

Disadvantages

While using a personal loan to pay off student loans could be tempting, here are some serious drawbacks to keep in mind:

• Most personal loan lenders prohibit using loans to repay student debt: When you apply for a personal loan, you have to sign a loan agreement that states you’ll abide by the lender’s terms. Most personal loan lenders have strict policies that prohibit paying for school with a personal loan or refinancing existing student loans with a personal loan.
• Personal loans have shorter repayment terms: Personal loans tend to have short repayment terms — often seven years or less. If you refinance your student loans instead, you might have as long as 20 years to repay your loans, depending on the lender and the term you choose. Federal student loan repayment options also typically come with much longer repayment terms.
• Personal loans typically have higher interest rates: Because personal loans can be discharged in bankruptcy, lenders see them as riskier forms of debt. To offset that risk, they charge higher interest rates than you’d get with student loan refinancing. This means you could likely get a lower interest rate by refinancing.
• Personal loans aren’t eligible for the student loan interest tax deduction: If you use a personal loan to pay off student loans instead of refinancing your debt, you’ll lose out on the student loan interest tax deduction. Depending on your income, you might be able to deduct up to $2,500 in student loan interest from your taxes, but personal loans aren’t eligible for this deduction.

If you decide to refinance your student loans, be sure to consider as many lenders as possible to find the right loan for you. You can do this easily with Credible — you can compare your rates from our partner lenders in the table below in just two minutes.

Lender	Fixed rates from (APR)	Variable rates from (APR)	Loan terms (years)
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	4.4%+	4.67%+	5, 7, 10, 15, 20
Fixed APR: 4.4%+ Variable APR: 4.67%+ Min. credit score: 720 Loan amount: $10,000 to $400,000 Loan terms (years): 5, 7, 10, 15, 20 Repayment options: Military deferment, forbearance Fees: Late fee Discounts: Autopay Eligibility: Must have a credit score of at least 720, a minimum income of $60,000, and must be a resident of Texas Customer service: Email, phone Soft credit check: 720 Cosigner release: No Loan servicer: Firstmark Services Max. Undergraduate Loan Balance: $100,000 - $149,000 Max. Graduate Loan Balance: $200,000 - $400,000 Offers Parent PLUS Refinancing: Does not disclose
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	5.39%+1	5.39%+1	5, 7, 10, 15, 20
Fixed APR: 5.39%+1 Variable APR: 5.39%+1 Min. credit score: Does not disclose Loan amount: $10,000 to $750,000 Loan terms (years): 5, 7, 10, 15, 20 Repayment options: Immediate repayment, academic deferment, military deferment, forbearance, loans discharged upon death or disability Fees: Late fee Discounts: Autopay, loyalty Eligibility: Must be a U.S. citizen or permanent resident and have at least $10,000 in student loans Customer service: Email, phone, chat Soft credit check: Yes Cosigner release: After 24 to 36 months Loan servicer: Firstmark Services Max. Undergraduate Loan Balance: $100,000 to $149,000 Max. Graduate Loan Balance: Less than $150,000 Offers Parent PLUS Refinancing: Yes
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	5.99%+2	5.99%+2	5, 7, 10, 12, 15, 20
Fixed APR: 5.99%+2 Variable APR: 5.99%+2 Min. credit score: Does not disclose Loan amount: $5,000 to $300,000 Loan terms (years): 5, 7, 10, 12, 15 Repayment options: Military deferment, forbearance, loans discharged upon death or disability Fees: Late fee Discounts: Autopay Eligibility: All states except for ME Customer service: Email, phone, chat Soft credit check: Yes Cosigner release: After 24 to 36 months Loan servicer: College Ave Servicing LLC Max. Undergraduate Loan Balance: $100,000 to $149,000 Max. Graduate Loan Balance: Less than $300,000 Offers Parent PLUS Refinancing: Yes
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	7.41%+5	7.39%+5	5, 10, 15, 20
Fixed APR: 7.41%+5 Variable APR: 7.39%+5 Min. credit score: 700 Loan amount: $7,500 to $200,000 Loan terms (years): 5, 10, 15, 20 Repayment options: Immediate repayment, academic deferment, forbearance, loans discharged upon death or disability Fees: None Discounts: Autopay Eligibility: Must be a U.S. citizen or permanent resident and submit two personal references Customer service: Email, phone Soft credit check: Yes Cosigner release: After 36 months Loan servicer: Granite State Management & Resources (GSM&R) Max. Undergraduate Loan Balance: $150,000 to $249,000 Max. Graduate Loan Balance: $150,000 to $199,000 Offers Parent PLUS Refinancing : Yes
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	5.08%+3	4.53%+3	5, 7, 10, 12, 15, 20
Fixed APR: 5.08%+3 Variable APR: 4.53%+3 Min. credit score: 680 Loan amount: $10,000 to $250,000 Loan terms (years): 5, 7, 10, 12, 15, 20 Repayment options: Forbearance Fees: None Discounts: None Eligibility: Must be a U.S. citizen or permanent resident, have at least $15,000 in student loan debt, and have a bachelor’s degree or higher from an approved school Customer service: Email, phone Soft credit check: Yes Cosigner release: No Loan servicer: Mohela Max. Undergraduate Loan Balance: $250,000 Max. Graduate Loan Balance: $250,000 Offers Parent PLUS Refinancing: Yes
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	5.61%+4	6.61%+4	5, 10, 15, 20
Fixed APR: 5.61%+4 Variable APR: 6.61%+4 Min. credit score: 670 Loan amount: $5,000 to $250,000 Loan terms (years): 5, 10, 15, 20 Repayment options: Academic deferment, military deferment, forbearance Fees: Late fee, returned payment fee Discounts: Autopay Eligibility: Must be U.S. citizen or permanent resident Customer service: Email, phone, chat Soft credit check: Yes Cosigner release: Yes Max undergraduate loan balance: $250,000 Max graduate loan balance: $250,000 Offers Parent PLUS refinancing: Yes
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	6.94%+ 7	N/A	5, 7, 10, 15, 20
Fixed APR: 6.94%+ 7 Variable APR: N/A Min. credit score: 670 Loan amount: Up to $300,000 Loan terms (years): 5, 7, 10, 15, 20 Time to fund: Usually one business day Repayment options: Academic deferral, military deferral, forbearance, death/disability discharge Fees: None Discounts: Autopay Eligibility: Available in all 50 states Customer service: Email, phone Soft credit check: Yes Cosigner release: After 24 months Max. undergraduate loan balance: $300,000 Max. graduate balance: $300,000 Offers Parent PLUS loans: Yes Min. income: None
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	4.49%+	4.76%+	5, 7, 10, 15
Fixed APR: 4.49%+ Variable APR: 4.76%+ Min. credit score: 700 Loan amount: $5,000 to $300,000 Loan terms (years): 5, 7, 10, 15 Max. undergraduate Loan Balance: $125,000 Time to Fund: 10 to 30 days Repayment options: Immediate repayment, forbearance Fees: Late fee Discounts: Autopay Eligibility: Must be a U.S. citizen or permanent resident and have already graduated with at least an associate degree from an eligible institution Customer service: Email, phone Soft credit check: Yes Cosigner release: After 12 months Loan servicer: LendKey Technologies Inc. Max. graduate Loan Balance: $175,000 Credible Review: LendKey Student Loans review Offers Parent PLUS Refinancing: No
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	5.5%+	N/A	7, 10, 15
Fixed APR: 5.5%+ Variable APR: N/A Min. credit score: 670 Loan amount: $10,000 up to the total amount Loan terms (years): 7, 10, 15 Repayment options: Military deferment, loans discharged upon death or disability Fees: None Discounts: None Eligibility: Must be a U.S. citizen or permanent resident and have at least $10,000 in student loans Customer service: Email, phone Soft credit check: Yes Cosigner release: No Loan servicer: AES Max. Undergraduate Loan Balance: No maximum Max. Gradaute Loan Balance: No maximum Offers Parent PLUS Refinancing: Yes
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	4.74%+ - 9.69%+	6.94%+ - 13.6%+	5, 7, 10, 15, 20, 25
Fixed APR: 4.74%+ - 9.69%+ Variable APR: 6.94%+ - 13.6%+ Min. credit score: 680 Loan amount: $5,000 to $500,000 (depending on degree) Loan terms (years): 5, 7, 10, 15, 20, 25 Time to fund: 3 business days Repayment options: Immediate, payment extension, reduced payment plan, rate reduction, term modification, extended grace period, interest only, rate and term modification, hardship forbearance, natural disaster forbearance, military forbearance, academic deferment Fees: Late fee, NSF fee Discounts: Autopay Eligibility: Must be a U.S. citizen or have permanent residency status with a valid U.S. Social Security number Customer service: Email, phone Soft credit check: Yes Cosigner release: After 24 months Loan servicer: Firstmark Services Max. undergraduate loan balance: $125,000 Max. graduate loan balance: $500,000 Offers Parent PLUS loans: Yes Min. income: $36,000
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	5.29%+	N/A	5, 10, 15
Fixed APR: 5.29%+ Variable APR: N/A Min. credit score: 680 Loan amount: $7,500 to $250,000 Loan terms (years): 5, 10, 15 Repayment options: Academic deferment, military deferment, forbearance, loans discharged upon death or disability Fees: None Discounts: Autopay Eligibility: Available in all 50 states; must also have at least $7,500 in student loans and a minimum income of $40,000 Customer service: Email, phone Soft credit check: Does not disclose Cosigner release: No Loan servicer: Rhode Island Student Loan Authority Max. Undergraduate Loan Balance: $150,000 - $249,000 Max. Graduate Loan Balance: $200,000 - $249,000 Offers Parent PLUS Refinancing: Yes
Compare personalized rates from multiple lenders without affecting your credit score. 100% free! Compare Now Trustpilot
All APRs reflect autopay and loyalty discounts where available | 1Citizens Disclosures | 2College Ave Disclosures | 5EDvestinU Disclosures | 3 ELFI Disclosures | 4INvestEd Disclosures | 7ISL Education Lending Disclosures

Find Your Student Loan

Additional loan repayment options

If you take out a personal loan, you’ll make fixed monthly payments until the loan is paid — typically for one to seven years, depending on the lender. Private student loans function similarly, though you’ll usually have five to 20 years to repay them.

But if you have federal student loans, there are other loan repayment options in addition to the standard 10-year repayment plan, which might be a better fit for your situation than using a personal loan. Here are a few choices to consider:

• Income-driven repayment: If you sign up for an IDR plan, your payments will typically be 10% to 20% of your discretionary income — in some cases, this could bring your payments down to $0 per month. Plus, you could have any remaining balance forgiven after 20 to 25 years, depending on the plan you choose.
• Graduated repayment: With this kind of plan, your payments will start low and gradually increase over time. This could be helpful if you expect your income to rise in the future.
• Extended repayment: This type of plan allows you to extend your repayment term up to 25 years, which can reduce your monthly payments. There’s also an option for an extended graduated repayment plan — this will extend your term and give you payments that start low and increase every two years. Just keep in mind that you’ll pay more interest over time with a longer term.
• Student loan forgiveness: Federal student loan borrowers have access to a variety of student loan forgiveness programs, which can discharge some or all of your federal loan balance. These programs are typically available to borrowers who work in specific careers — such as doctors, lawyers, and teachers.

Learn More: Can You Pay Your Student Loans With a Credit Card?

Is using a personal loan to pay off student loan debt right for you?

In some cases, using a personal loan to pay off education debt can be a good idea — especially if you can take advantage of a low interest rate. However, it’s important to carefully weigh the pros and cons as well as fully understand how personal loans work so you can make the best decision for your financial situation.

Refinancing your student loans is usually a better way to manage your student loan debt. Through refinancing or student loan consolidation, you could get a lower interest rate or a lower monthly payment with an extended repayment term.

If you decide to refinance, it’s a good idea to shop around and compare as many lenders as possible to find a loan that works for you. Credible makes this easy — you can see your prequalified rates from multiple lenders after filling out a single form.

About the author

Kat Tretina

Kat Tretina is a freelance writer who covers everything from student loans to personal loans to mortgages. Her work has appeared in publications like the Huffington Post, Money Magazine, MarketWatch, Business Insider, and more.

Read More

Home » All » Personal Loans » Should I Use a Personal Loan to Pay off My Student Loan Debt?