Editor's choice: Fiona personal loans
- Wide range of loans available
- Coapplicants accepted
- Most credit types welcome
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And watch out for high interest rates and short repayment terms that can make these loans difficult to repay on a college student’s budget.
Personal loans allow students and parents to apply for amounts from $2,000 to $50,000 or more. You repay what you borrow plus interest and fees over a period of time both you and the lender agree to.
Lenders typically express the cost of a personal loan as an APR, your annual percentage rate. APRs can range from 6% to up to 36%, but you might have a hard time qualifying for a 6% APR as a student.
Repayment terms can range from one to seven years through monthly installments that begin shortly after you receive your funds.
If the tuition’s covered but you need help with other expenses, you can take advantage of standard personal loans offered by banks and credit unions.
But if you’re looking for a personal loan to help cover educational expenses, your options are more limited since most lenders restrict using a personal loan for college. Compare these online lenders that allow you to apply your funds to educational expenses.
|Lender||Eligibility||Cosigners allowed?||APR range||Loan amounts||Terms|
|Best Egg||Must have a FICO® score of 640+ and be a US citizen or permanent resident. Not available in IA, WV, VT, PR, or GU.||No||5.99% to 29.99%||$2,000–$35,000||3 to 5 years|
|Stilt||Must be a US citizen, permanent resident or have a valid F1, OPT, H1B, H4, O1, L1, TN, J1 or DACA visa. You also must have a job and a valid US bank account and live in a serviced state.||No||7.99% to 15.99%||$1,000–$25,000||Up to 3 years|
|Upstart||Credit score of 580 or 600 depending on state of residence, not a resident of West Virginia or Iowa, regular source of income, valid bank account, US citizen or permanent resident, ages 18+ (19+ in Alabama and Nebraska), proof of identity, valid email address||No||8.69% to 35.99%||$1,000–$50,000||3 or 5 years|
|Digital Federal Credit Union||Must be a current or former employee of a participating employer; a member of a participating organization, community or condo association; or a relative of an existing member.||Yes||5.99% to 18%||$200–$100,000||Up to 5 years|
|Boro||No||Starting at 15.9%||–||1 to 3 years|
Many students haven’t yet built a strong credit history, which often comes with steadier footing after graduation. Because they require steady employment, a minimum income and more, college students might want to bring on a parent as a cosigner. Or, parents might prefer taking out a personal loan in their name.
You’ll need to meet common eligibility requirements that include:
Your options for personal loans may be limited if you’re still hitting the books. But many banks and lenders accept cosigners, which can help you qualify for stronger rates and better terms than you’d find on your own.
The best option for you will depend on your situation, budget and goals.
If you’re steadily paying off student loans or credit cards while supporting your studies, you might qualify for an unsecured personal loan on your own.
If you’re not financially independent, you might have trouble qualifying for a personal loan even with a cosigner. Instead, you and your parents may want to consider taking out a personal loan in their name.
If one of your parents has a high income and long history of repaying debt on time, you’ll find more competitive rates and terms than for someone who’s still in school.
To show that you’re committed to repaying your loved ones, consider drawing up an informal agreement that includes how much you’ll pay monthly and by when. Or look to a service like Loanable, which helps you create a legally binding contract after you’ve landed a job.
It’s tough to find a personal loan provider that allows you to both apply with a cosigner and put the funds toward school. But for expenses that aren’t directly related to school — like paying your off-campus rent — a cosigner might help you qualify for competitive rates.
Review your lender’s requirements for cosigners to make sure you can meet minimum income, credit scores and more.
Home equity loans — sometimes called second mortgages — allow your parents to borrow against the equity of their home. Because their property acts as collateral for the loan, you’ll see more competitive rates than for unsecured loans. People also use home equity loans to consolidate student debt.
You can typically borrow between 80% and 90% of your home’s equity, paying it off over a longer period than a traditional personal loan. Given competitive rates and longer repayment terms, lenders like M&T Bank suggest a home equity loan as a student loan alternative.
That providers limit borrowers from using personal loans for educational expenses isn’t surprising: Students just don’t have the same needs and ability to repay as your average borrower.
Key differences between personal loans and private student loans include:
It depends on your circumstances and finances. Ask yourself the following questions to help you decide if a personal loan is right for you.
Your financing options are further limited if you’re still in school and can’t get any more federal or private funding — especially if you don’t have a cosigner. However, you still have some choices. Some lenders like Boro consider factors like your GPA instead of your credit score and don’t require a cosigner.
These options are also to international students studying on an F1 visa. International students are ineligible for a federal loan and most private student loans, but can apply through a lender like Boro or Stilt, which don’t even require a Social Security number.
Personal loans aren’t the only option for students needing help with extra expenses before they graduate.
Personal loans aren’t designed for students. You generally need a job, strong credit and the ability to repay what you owe right away. Parents typically have an easier time qualifying if they have a steady job and strong credit. They can either apply on their own or cosign their children’s loans.
But both options may not be ideal: you just might find other sources of financing by talking with your school’s financial aid office. Learn more about how it all works with our comprehensive guide to student loans.
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