Editor's choice: PenFed Credit Union personal loans
- Competitive rates as low as 6.49%
- No hidden fees
- Loans up to $35,000
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The coronavirus pandemic has had an unprecedented impact on Americans’ finances. If you lost your job and are considering taking out a personal loan to cover bills, you might have a difficult time qualifying. Read our financial guide to COVID-19 to explore other options available to you.
Student loans can help with tuition costs and living expenses while you’re in school, but they’re limited. You can’t use them to cover larger personal expenses like buying a car. And depending on how much you qualify for, you might not have enough left over to cover rent and food.
A personal loan can help in these situations, but consider avoiding them if you’re unemployed — repayments start right away.
There’s no one “best” personal loan for everyone. It depends on what you need the money for and your personal financial situation. Your options can vary depending on what you need to buy, if you’re employed and if you have a credit score.
Don’t have a cosigner? You’re not totally without options. Some lenders specialize in offering personal loans to college students. Instead of looking at your credit score, lenders consider factors like your academic performance and standardized test scores. But these loans can come with higher rates than personal loans with a cosigner, and they’re often not available in all states.
These types of loans are typically available to international students on a valid visa and can be used as a student loan alternative. If this sounds like what you need, you can get started by looking into Boro’s personal loans.
You can’t use a student loan to buy a car, and most traditional auto loans are off the table if you have limited income or no credit. But it’s possible to find auto loans designed specifically for students. The down payment might be larger than your typical car loan, however. And it may not be ideal if you have less-than-stellar grades, since lenders often consider your academic record in determining your eligibility.
But if you have strong academics, this could be the easiest way to go — especially if you don’t have a cosigner. You might want to look into Boro’s auto loans if this describes your situation.
Bringing on a cosigner can help you qualify for a loan even if you don’t have a full-time job or credit score. With this option, your lender considers your cosigner’s creditworthiness when yours falls short.
Applying with a cosigner can also help you meet other requirements — like if the lender only works with residents of certain states. However, you typically both need to be US citizens or permanent residents to qualify. Sound like what you’re looking for? You may want to start by checking out FreedomPlus.
Federal and most private student loans allow you to use your funds to cover more than just tuition and fees. You can use student loans for living expenses like rent, transportation and even traveling home for the holidays.
If you still have funds available, consider taking on more student debt before you look into a personal loan. Student loans typically come with more flexible repayment plans and lower rates than personal loans. Plus, federal loans don’t have credit or income requirements, so you won’t need a cosigner.
Even if you aren’t technically a student, many private student loan providers offer financing for postgraduate expenses for medical and law students.
Law students who need help covering the cost of studying for and taking the bar might want to look into bar exam loans. Medical students can use residency relocation loans to cover the cost of applying for and relocating for a residency, as well as board exam study courses and fees.
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
Though personal loans can be more expensive than student loans, there are benefits to this type of financing:
Before applying for a personal loan while you’re in school, consider these potential drawbacks:
Repaying a loan in school can be tricky, especially if you have a low-paying job. If you’re not employed, consider asking your cosigner to cover your in-school repayments — you can pay them back later.
Otherwise, make a budget that has room for the amount you owe each month. Taking on a side gig can also help cover the extra monthly expense. If you think you’ll have trouble making a repayment one month, contact customer service as soon as possible. Your lender could be willing to work out new terms that are more affordable.
Not sure a personal loan is what you’re after? Consider these alternatives:
Taking out a personal loan in college isn’t always a good idea, especially if you don’t have enough money coming in each month to cover repayments. But it could be useful if you want to take advantage of a career-changing opportunity or buy something integral to your academic life like a car or computer.
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