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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.

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 loanStudent loan

Loan purpose

Nearly any legitimate purpose, though some restrictions may apply

May only be used for secondary education expenses

Disbursement

Many lenders can directly deposit your funds into a bank account

Your school’s financial aid office receives your loan funds

Potential lenders

Banks, credit unions and private online lenders

Federal government, banks and private online lenders

Repayment terms

Repayments generally start after the first month

Repayments generally start after a grace period of at least six months after graduation

Tax benefits

None

Interest paid is often deductible from your annual taxes

Discharge

Can be discharged through bankruptcy

Much more difficult to discharge; may require a court appeal

Compare top online personal loans and student loans

Name Product Filter Values APR Min. Credit Score Loan Amount
Stilt personal loans
7.99% to 15.99%
Not required
$1,000 – $25,000
No green card? No problem. You could still qualify for a personal loan.
Payoff personal loans
5.99% to 24.99%
640
$5,000 – $40,000
Pay down your debt with a fixed APR and predictable monthly payments.
Upgrade personal loans
5.94% to 35.97%
600
$1,000 – $50,000
Affordable loans with two simple repayment terms and no prepayment penalties.
Even Financial personal loans
4.99% to 35.99%
550
$1,000 – $100,000
Get connected to competitive loan offers instantly from top online consumer lenders.
Monevo personal loans
1.99% to 35.99%
None
$500 – $100,000
Quickly compare multiple online lenders with competitive rates depending on your credit.
Upstart personal loans
5.55% to 35.99%
580 or 600 depending on state of residence
$1,000 – $50,000
This service looks beyond your credit score to get you a competitive-rate personal loan.
OneMain Financial personal loans
18% to 35.99%
Varies
$1,500 – $20,000
An established online and in-store lender with quick turnaround times. Poor credit is OK.
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Name Product Filter Values APR Min. Credit Score Loan Amount
BHG personal loans
Varies
700
$20,000 – $200,000
A highly-rated lender with quick turnaround and reliable customer service.
Credible personal loans
2.49% to 35.99%
Fair to excellent credit
$600 – $100,000
Get personalized rates in minutes and then choose an offer from a selection of top online lenders.
Best Egg personal loans
5.99% to 29.99%
600
$2,000 – $50,000
A prime online lending platform with multiple repayment methods.
PenFed Credit Union personal loans
5.99% to 17.99%
650
$600 – $50,000
With over 80 years of lending experience, this credit union offers personal loans for a variety of expenses.
SoFi personal loans
4.99% to 19.63%
680
$5,000 – $100,000
A highly-rated lender with competitive rates, high loan amounts and no fees.
Monevo personal loans
1.99% to 35.99%
None
$500 – $100,000
Quickly compare multiple online lenders with competitive rates depending on your credit.
Tally+ Express
7.9% to 29.99%
660
$2,000 – $30,000

Only available for Line of Credit and Debt consolidation

Upgrade personal loans
5.94% to 35.97%
600
$1,000 – $50,000
Affordable loans with two simple repayment terms and no prepayment penalties.
Upstart personal loans
5.55% to 35.99%
580 or 600 depending on state of residence
$1,000 – $50,000
This service looks beyond your credit score to get you a competitive-rate personal loan.
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Compare up to 4 providers

Name Product APR Min. Credit Score Loan amount Loan Term
Purefy Student Loan Refinancing (Variable Rate)
1.88% to 5.54%
650
$5,000 – $300,000
5 to 20 years
Refinance all types of student loans — including federal and parent PLUS loans.
Credible Student Loan Refinancing
1.80% to 8.90%
Good to excellent credit
Starting at $5,000
5 to 20 years
Get prequalified offers from top student loan refinancing providers in one place.
SoFi Student Loan Refinancing Variable Rate (with Autopay)
2.25% to 6.59%
650
Starting at $5,000
5 to 20 years
A leader in student loan refinancing, SoFi can help you refinance your loans and pay them off sooner.
Splash Financial Student Loan Refinancing
1.89% to 6.66%
650
Starting at $7,500
5 to 25 years
Save on your student loans with this market-leading newcomer.
Education Loan Finance Student Loan Refinancing
2.39% to 6.01%
680
Starting at $15,000
5 to 20 years
Lower your student debt costs with manageable payments, affordable rates and flexible terms.
Earnest Student Loan Refinancing
1.88% to 5.64% APR with autopay
650
$5,000 – $500,000
5 to 20 years
Get a tailored interest rate and repayment plan with no hidden fees.
Supermoney student loan refinancing
Starting at 1.9%
No minimum credit score
$5,000 – $300,000
5 to 20 years
Compare options to combine both private and federal debts into one monthly payment.
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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.

Compare personal loan and student loan offers now

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

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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.

Frequently asked questions

Explore personal loans and student loans even further with these answers to common questions.

More guides on Finder

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