Personal loans vs student loans: Which has better value? | finder.com

Compare personal loans vs. student loans

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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.
Credible Personal Loans

Our top pick: Credible

Quickly get personal loan offers from top online lenders.

  • Minimum Loan Amount: $1,000
  • Maximum Loan Amount: $100,000
  • Loan Terms: 2 to 7 years
  • One simple form
  • Must have good to excellent credit

    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

    Rates last updated January 16th, 2019
    Name Product Product Description Min Loan Amount Max. Loan Amount Requirements
    Boro Personal Loans for Students
    Get help paying for college or other expenses while you’re still in school.
    $1,000
    $3,000
    Enrolled in a US school, be a US resident or have an applicable visa; 2.0+ GPA or 3.0+ for graduate students, live in an eligible state.

    Boro Auto Loans for Students
    Car loans for international and college students with 4.49% (starting at) APR.
    $5,000
    None
    US citizen, permanent resident or F-1, OPT, H-1B, J-1, L, O-1, G, A5 or C8 visa holder, minimum GPA, dealer in eligible state
    Stilt Personal Loans
    No green card? No problem. You could still qualify for a personal loan.
    $1,000
    $25,000
    Be employed, have a US bank account, live in a state where Stilt operates, hold one of the following visas: F-1 and OPT, H-1B, H4, O-1, L-1, TN, J-1, DACA or be a US citizen.
    FreedomPlus Personal Loans
    Consolidate debt and more with these low-interest loans. Cosigners welcome.
    $7,500
    $40,000
    Must have a credit score of 620+, debt-to-income ratio of 40% or lower and annual income of at least $30,000.

    Compare up to 4 providers

    A selection of loan offers from the best personal loan providers

    Rates last updated January 16th, 2019

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    Unfortunately, none of the personal loan providers offer loans for that credit score. If you are in urgent need of a small loan, you might want to consider a short term loan.
    Name Product Product Description Min. Credit Score Max. Loan Amount APR
    Credible Personal Loans
    Get personalized rates in minutes and then choose a loan offer from several top online lenders.
    Good to excellent credit
    $100,000
    4.99% to 36% (fixed)
    Monevo Personal Loans
    Quickly compare multiple online lenders with competitive rates depending on your credit.
    550
    $100,000
    3.34% to 35.99% (fixed)
    LendingClub Personal Loan
    A peer-to-peer lender offering fair rates based on your credit score.
    640
    $40,000
    6.95% to 35.89% (fixed)
    SoFi Personal Loan Fixed Rate (with Autopay)
    No fees. Multiple member perks such as community events and career coaching.
    680
    $100,000
    6.79% to 15.49% (fixed)
    Even Financial Personal Loans
    Get connected to competitive loan offers instantly from top online consumer lenders.
    550
    $100,000
    3.84% to 35.99% (fixed)
    NetCredit Personal Loan
    Check eligibility in minutes and get a personalized quote without affecting your credit score.
    550
    $10,000
    34% to 155% (Varies by state) (fixed)
    Best Egg Personal Loans
    A prime lender with multiple repayment methods.
    640 FICO®
    $35,000
    5.99% to 29.99% (fixed)
    OneMain Financial Personal and Auto Loans
    An established online and in-store lender with quick turnaround times. Poor credit is OK.
    Varies
    $30,000
    16.05%–35.99%* (fixed)

    Compare up to 4 providers

    A selection of loan offers from the best student lenders

    Rates last updated January 16th, 2019
    Name Product Min. Credit Score Max. Loan Amount APR Product Description
    Earnest Student Loan Refinancing Variable Rate (w/ autopay)
    650
    None
    2.57% to 6.97% (variable)
    Get a tailored interest rate and repayment plan with no hidden fees.
    LendingTree Student Loans
    Good to excellent credit
    Varies by lender
    3% (As low as) (fixed)
    Compare multiple student loans and student loan refinancing options in one place.
    SoFi Student Loan Refinancing Variable Rate (with Autopay)
    650
    full balance of your qualified education loans
    2.47% to 6.99% (variable)
    A leader in student loan refinancing, SoFi can help you refinance your loans and pay them off sooner.
    Credible Student Loan Refinancing
    Good to excellent credit
    None
    2.57%(As low as ) (variable)
    Get prequalified offers from top student loan refinancing providers in one place.
    PenFed Student Loan Refinancing
    700
    $300,000
    3.75%–7.03% (fixed)
    Straightforward refinancing with competitive rates.
    Purefy Student Loan Refinancing
    620
    $300,000
    3.01% to 8.61% (variable)
    Refinance all types of student loans — including federal and parent PLUS loans.
    Splash Financial Student Loan Refinancing
    700
    $300,000
    3.75% (starting at) (variable)
    Save on your student loans with this market-leading newcomer.

    Compare up to 4 providers

    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

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    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

    Aliyyah Camp

    Aliyyah Camp is a publisher for finder.com helping folks compare personal, student, car and business loans. When she's not helping people with their personal finances, you can find her going for runs outdoors.

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    US Personal Loans Offers

    Important Information*
    Credible Personal Loans

    Get personalized rates in minutes and then choose a loan offer from several top online lenders.

    Even Financial Personal Loans

    Get connected to competitive loan offers instantly from top online consumer lenders.

    LendingClub Personal Loan

    A peer-to-peer lender offering fair rates based on your credit score.

    SoFi Personal Loan Fixed Rate (with Autopay)

    No fees. Multiple member perks such as community events and career coaching.

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    US Personal Loans Offers

    Important Information*
    Credible Personal Loans

    Get personalized rates in minutes and then choose a loan offer from several top online lenders.

    Even Financial Personal Loans

    Get connected to competitive loan offers instantly from top online consumer lenders.

    LendingClub Personal Loan

    A peer-to-peer lender offering fair rates based on your credit score.

    SoFi Personal Loan Fixed Rate (with Autopay)

    No fees. Multiple member perks such as community events and career coaching.

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