Best Personal Loans for Students of April 2024

While you can use student loans and other financial aid to help pay for college, they might not be enough to cover all your expenses. In some cases, it can make sense to take out a personal loan to fill this kind of financial gap.

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Personal loans for students

Since many students haven’t yet built a credit history and may not have income, qualifying for some personal loans could be difficult. That’s why it’s smart to consider loans that students are most likely to qualify for on their own or with a little help. We reviewed dozens of personal loan lenders to find ones that allow cosigners or don’t require that you have a credit score.

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BHG Money: Best for large personal loans

Learn More: Using Student Loans for Housing, Living Expenses, and More

Methodology

Credible evaluated the best personal loan lenders for students based on factors such as customer experience, minimum fixed rate, maximum loan amount, funding time, loan terms, fees, discounts, and whether cosigners are accepted. Credible’s team of experts gathered information from each lender’s website, customer service department, directly from our partners, and via email support. Each data point was verified by a third party to make sure it was accurate and up to date.

Learn more about how Credible rates lenders by exploring our Personal Loans Lender Rating Methodology.

Can you take out personal loans for students?

While you generally can’t use personal loans for education costs like tuition, they could help cover other expenses, like paying for college textbooks, housing, and food. But unless you have a regular income and an established credit history, finding a lender to approve your application could be difficult.

This is why applying with a cosigner can be a good move. A cosigner is someone who has both a reliable income and good credit that vouches for your ability to repay the loan. This might be one of your parents or another family member. Just know that if you don’t repay the loan, they’ll be on the hook for it.

Personal loans vs. student loans: Which to choose?

You can use both personal loans and student loans to cover expenses while attending college, but each has distinct pros and cons. Here’s how both types of loans work:

Personal loans

You can use a personal loan for almost any personal expense. Most are unsecured — meaning you won’t have to pledge an asset as collateral — and loan amounts generally range from $600 to $100,000 or more.

You’ll typically need verifiable income and good to excellent credit (usually defined as a FICO score of 670 or more) to get approved for a personal loan.

Personal loans can have much higher interest rates than student loans, which can make them a relatively expensive option. The annual percentage rate (APR), which includes the interest rate and fees, indicates how much it will cost to take out a personal loan. Unlike student loans, personal loans don’t let you defer payments during school, so you’ll have to start making payments as soon as the loan is disbursed.

Check Out: Best Student Loans for Bad Credit

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Student loans

Both federal and private student loans are specifically designed to help borrowers pay for college. It’s usually a good idea to take out federal loans first, since they come with protections such as access to income-driven repayment plans and student loan forgiveness programs. You can then use private student loans to fill any financial gaps left over.

Here are the types of student loans you might be able to get:

• Federal Direct Subsidized Loans are available to undergraduate borrowers with financial need. The government pays the interest on subsidized loans while you’re in school.
• Federal Direct Unsubsidized Loans are available to both undergraduate and graduate students. You’re responsible for all the interest that accrues on unsubsidized loans.
• Federal Direct PLUS Loans are available to students who need to pay for grad school and parents who want to cover their child’s education costs. Unlike other types of federal student loans, PLUS loans require a credit check.
• Private student loans are offered by private lenders. To get approved for a private loan, you’ll generally need either good to excellent credit or a cosigner who has good credit.

Using student loans for personal expenses

To attend college, you won’t only have to pay for tuition and fees — you’ll likely also have to cover personal expenses like college housing, textbooks, and transportation. Because of this, you can use both federal and private student loans for personal expenses while you’re going to school.

When taking out a private student loan, consider as many lenders as possible to find the right loan.

Can I get a personal loan as a student?

Yes, you might be able to get a personal loan as a student. But you’ll typically need to have good to excellent credit as well as verifiable income to get approved — this could be difficult for students who have little to no credit history or income.

Consider applying with a cosigner if you’re having trouble getting approved. Some lenders allow cosigners, but most of them don’t, so it’s important to take that into account when researching your options.

A cosigner can help you potentially get a lower APR, depending on their credit profile. It’s not guaranteed, but a cosigner can help you qualify for more favorable terms than if you applied on your own.

How can a student get a small loan?

If you need only a small loan to help you pay for your educational or living expenses, both personal loans and student loans can be an option.

Personal loans are available for as little as $600 or less, depending on the lender. When you apply for a loan, you can ask for only the amount you need.

Student loans typically come in higher loan amounts, but you should borrow only as much as you need. If you still end up with more money than you want, you might be able to return it, depending on the type of loan you have. Or you can simply pay it back as a payment to reduce your loan amount.

How to get a personal loan

Here’s what you need to do when taking out a personal loan:

1. Shop around and compare lenders: Do your research and compare the APR, repayment terms, fees, and eligibility requirements. You’ll want to compare as many lenders as possible to find the right one for you.
2. Choose your loan option: Once you’ve selected your lender, you’ll have a variety of loan options to choose from. Consider the costs and determine which one will not only save you money, but can check all your borrowing needs.
3. Complete the application: When filling out the application, you’ll most likely need to provide required documents like your ID, tax returns, or income statements from your employer. Submit the application and wait for approval.
4. Get your funds: Once you’re approved, sign the loan documents in order to receive your funds. You can usually expect your funds in about one week, though this can vary by the lender. Some lenders may even fund your loan on the same day or the next business day.

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How to get a student loan

If you decide to take out a student loan, follow these four steps:

1. Fill out the FAFSA: Your first step should be completing the Free Application for Federal Student Aid (FAFSA). With your FAFSA information, your school determines what federal financial aid you qualify for.
2. Apply for scholarships and grants: You don’t have to repay college scholarships or grants, which makes them an ideal option. Apply to as many as possible, as there’s no limit to how many scholarships and grants you can get. Depending on your FAFSA information, it’s also possible to qualify for scholarships from your school.
3. Accept federal student loans: After completing the FAFSA and submitting your information, your school will send you a financial aid award letter. The letter details which federal student loans and other federal aid you qualify for. From there, choose which aid to accept.
4. Use private student loans to fill the gaps: You can fill any financial gaps left over after you’ve exhausted your federal options by taking out a private student loan. To find the right loan for your needs, shop around and compare as many lenders as possible.

If you decide to take out a federal or private student loan, you can determine how much it will cost you by using a student loan calculator.

Other ways to get funding for school

Keep in mind that loans are far from the only way to pay for tuition and school-related expenses. You can also consider grants, scholarships and credit cards — although some of these options are better than others.

When you complete the FAFSA, your school will use the information you provide to determine if you’re eligible for any federal grants or scholarships. They may also offer you state- or school-level scholarships and grants. And you can always apply on your own for specific scholarships and grants that aren’t directly awarded by your school.

Think twice, however, about using credit cards to pay for school expenses. Credit card APRs are typically higher than other types of credit, like student loans or personal loans. It’s best to avoid credit card debt whenever possible because it’s the kind of debt that’s more likely to undermine your financial well-being than it is to help you build credit.

FAQ

Can students apply for personal loans online?

Yes, you can apply for a personal loan online. Students can find personal loans online from banks, credit unions, and traditional online lenders. You can compare your loan options online and choose a lender that suits your needs.

How can students with limited credit history improve their chances of getting personal loans?

If you have limited credit history, you can improve your chances of getting a personal loan by either applying with a cosigner or becoming an authorized user on a parent’s credit card. A cosigner can increase your chances of approval since it’s considered much less of a risk to a lender if someone else agrees to take on responsibility for the loan if you fail to make payments.

Additionally, as your parents make payments on their card with you as an authorized user, it will be reflected as a timely payment on your credit report, leading to improved credit. The age of the account also plays an important factor.

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