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Compare personal loans vs. student loans

With each offering its own benefits, we help guide you toward the best decision for your wallet.

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Editor's choice: LendingClub personal loans

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  • Coapplicants welcome
  • Check your rate without affecting your credit
  • May qualify with a credit score of 640
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There are some solid benefits to both personal loans and student loans when it comes to paying for school. Personal loans have less limits on how you spend your funds but student loans are typically more flexible. Which option is right for you depends on your unique situation.

Quick snapshot: 6 ways personal loans and student loans differ

Personal loan Student loan
Loan purposeNearly any legitimate purpose, though some restrictions may applyMay only be used for secondary education expenses
DisbursementMany lenders can directly deposit your funds into a bank accountYour school’s financial aid office receives your loan funds
Potential lendersBanks, credit unions and private online lendersFederal government, banks and private online lenders
Repayment termsRepayments generally start after the first monthRepayments generally start after a grace period of at least six months after graduation
Tax benefitsNoneInterest paid is often deductible from your annual taxes
DischargeCan be discharged through bankruptcyMuch more difficult to discharge; may require a court appeal

Compare top online personal loans and student loans

Data indicated here is updated regularly
Name Product Filter Values APR Min. Credit Score Max. Loan Amount
Stilt personal loans
7.99% to 15.99%
Not required
$25,000
No green card? No problem. You could still qualify for a personal loan.
Payoff personal loans
5.99% to 24.99%
640
$40,000
Pay down your debt with a fixed APR and predictable monthly payments.
Upgrade personal loans
7.99% to 35.97%
600
$35,000
Affordable loans with two simple repayment terms and no prepayment penalties.
Even Financial personal loans
4.99% to 35.99%
550
$100,000
Get connected to competitive loan offers instantly from top online consumer lenders.
Monevo personal loans
3.49% to 35.99%
None
$100,000
Quickly compare multiple online lenders with competitive rates depending on your credit.
LendingClub personal loans
10.68% to 35.89%
640
$40,000
A peer-to-peer lender offering fair rates based on your credit score.
OneMain Financial personal loans
18% to 35.99%
Varies
$20,000
An established online and in-store lender with quick turnaround times. Poor credit is OK.
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A selection of loan offers from the best personal loan providers

Data indicated here is updated regularly
Name Product Filter Values APR Min. Credit Score Max. Loan Amount
Credible personal loans
4.99% to 35.99%
Fair to excellent credit
$100,000
Get personalized rates in minutes and then choose an offer from a selection of top online lenders.
Monevo personal loans
3.49% to 35.99%
None
$100,000
Quickly compare multiple online lenders with competitive rates depending on your credit.
Fiona personal loans
4.99% to 35.99%
Good
$100,000
Get loan offers from multiple lenders at once without affecting your credit score.
LendingTree personal loans
Starting from 2.49%
Good to excellent credit
$50,000
Receive up to five loan offers in just minutes through LendingTree's simple online form.
SoFi personal loans
5.99% to 18.28%
680
$100,000
A highly-rated lender with competitive rates, high loan amounts and no fees.
NetCredit personal loans
34% to 155%
No minimum
$10,500
Check eligibility in minutes and get a personalized quote without affecting your credit score.
LightStream personal loans
Varies
Good to excellent credit
$100,000
Borrow up to $100,000 with low rates and no fees.
Even Financial personal loans
4.99% to 35.99%
550
$100,000
Get connected to competitive loan offers instantly from top online consumer lenders.
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A selection of loan offers from the best student lenders

Data indicated here is updated regularly
Name Product Min. Credit Score Max. Loan Amount APR
SoFi Student Loan Refinancing Variable Rate (with Autopay)
650
Full balance of your qualified education loans
2.25% to 6.09%
A leader in student loan refinancing, SoFi can help you refinance your loans and pay them off sooner.
Purefy Student Loan Refinancing (Variable Rate)
620
$300,000
2.27% to 7.49%
Refinance all types of student loans — including federal and parent PLUS loans.
Credible Student Loan Refinancing
Good to excellent credit
None
1.99% to 9.24%
Get prequalified offers from top student loan refinancing providers in one place.
Splash Financial Student Loan Refinancing
650
None
1.89% to 6.66%
Save on your student loans with this market-leading newcomer.
Education Loan Finance Student Loan Refinancing
680
None
2.39% to 6.01%
Lower your student debt costs with manageable payments, affordable rates and flexible terms.
Earnest Student Loan Refinancing
650
$500,000
1.99% to 5.34%
Get a tailored interest rate and repayment plan with no hidden fees.
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What’s the difference between a student loan and a personal loan?

Personal loans can be used for just about anything, though some lenders restrict how you spend your loan funds. On the other hand, student loans have just one purpose: being used for secondary education expenses.

These differences mean you need to break down a few points to see how they compare.

What are the benefits of personal loans and student loans?

Personal loans

  • Use funds for any purpose. In general, you’re free to use the money you receive from a personal loan for just about anything, although your loan contract may prohibit you from spending your money on anything beyond the original purpose.
  • It’s simple to apply. Personal loans have much less strenuous requirements than student loans. You won’t need to have any documentation verifying your education with a personal loan.

Student loans

  • Lower interest. Student loans often come with lower interest rates when compared to general personal loans. You may qualify for a government-subsidized loan, which could come with even lower rates.
  • Repayment flexibility. Depending on your loan and lender, you may be able to make interest-only or no payments at all while you’re studying. Student loans also tend to come with longer repayment terms of up to 20 years.

What are the drawbacks of personal loans and student loans?

Personal loans

  • Higher interest. The interest rates that come with personal loans are often higher than specialized loans designed for cars, education or housing.
  • Repayments start immediately. You get no grace period when it comes to payments. Instead, you’ll start paying toward your loan’s principal and interest soon after approval. Most personal loan lenders also don’t offer benefits that protect you in the event of financial hardship.

Student loans

  • Funds restricted to education. You must use your funds toward tuition, textbooks, housing and other education-related expenses.
  • It’s easy to borrow too much. When facing the cost of tuition, housing and other potential expenses, you can end up overestimating how much you actually need. Remember that you’re paying interest on the full amount.

Which borrowing option is better suited for me?

A personal loan may be a better option if you need money for more than just education. They can help with day-to-day expenses that may come up, or your loan funds can be used to pay for a unique trip during your college experience that you may not be able to take without a little extra funding.

However, if you know you’ll want a long term and more flexibility when it comes to payment, a student loan may be a better choice. Because they have lower interest rates and don’t require you to start paying back immediately, you can focus on your education without needing a job or payment plan.

Compare personal loans to even more borrowing options

Personal loan vs. Line of credit
Personal loan vs. Home equity loan
Personal loan vs. Mortgage
Personal loan vs. Business loan
Personal loan vs. 401(k) loan
Personal Loan vs. Home equity line of credit

Bottom line

Personal loans and student loans have their own unique features that make them regular borrowing choices for students across the US. If you’re looking for quick turnaround and only need a small loan, a personal loan may be better for your budget. But if you’re going to need to pay for four years of education expenses, the low interest and payment flexibility of a student loan may be more appealing.

You can read more about how student loans work and personal loans work by ready our guides. Carefully compare your loan options and weigh all the benefits with the drawbacks. After all, you’ll be paying for the next few years of your life.

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