Best Personal Loans for College Students

Contributor, Benzinga

Federal and private student loans are the traditional route to fund your education and living expenses, but a personal loan can provide funding coverage anywhere you still fall short.

Use Benzinga’s list of the best personal loans for college students to find lenders and loan comparison services to help you get the cash you need.

Best Personal Loans for College Students

College is expensive. Life is expensive. And when you’re a student, you’re focusing on your studies, not on making ends meet. This is why it’s so common for students to need outside financial support, whether from a relative, loans, other aid or all of the above.

It’s always best to exhaust your federal loan options before moving to other resources. Federal loans are typically low, fixed-rate loans with flexible repayment plans and deferment periods. 

You can apply for federal loans via the Free for Application for Federal Aid (FAFSA) form. But you may not be eligible if you’ve reached your federal aid cap or your program isn’t eligible for federal aid. If that’s the case, take a look at personal loans.

Personal loans can also offer low, fixed rates, especially if you’re a relatively older student with a good credit history. If you don’t have the best credit, services like BadCreditLoans.com can connect you to lenders who will still work with you. These loans are available in amounts up to $10,000 and can be a solid alternative to private student loans, which usually require that you or a cosigner have good credit.

A personal loan from a lender like Boro can also be ideal for college expenses. These are small loans up to $2,000 can be paid off in shorter amounts of time. These can help cover costs like books or a laptop without adding to your long-term debt load. If you repay these loans as agreed, it will also establish you as a trustworthy borrower and reflect positively on your credit report.

Take a look at the loan comparison among some of our recommended lending services.

APR
Fixed 5.99% – 24.99%.
Loan Amounts
$5,000 – $40,000
APR

Fixed 5.99% – 24.99%.

Origination Fee

0%–5% of the loan amount

Term Lengths

2–5 years

Min Credit Score

550

1 Minute Review

Happy Money offers personal loans that allow you to more efficiently consolidate high interest payments. Happy Money was previously known as Payoff. The company was founded in 2009 and has since helped fund over $3.5 billion in loans. Happy Money is a financial company that works with approved lending partners to fund loans. Happy Money designed its Payoff Loans to provide borrowers with the financial freedom and power to be matched with a lending partner. Benzinga reviews Happy Money Loans as a way for people to consolidate debt with potentially lower APR rates. 

Best For
  • People with lower credit scores
  • Credit card debt consolidation
Pros
  • No prepayment fees
  • Potentially lower APR rates starting around 5.99%
  • Improve credit score
Cons
  • Personal loans only available for credit card debt
pre-apply securely through Figure Personal Loans’s website
APR
Between 5.99% and 15%; autopay discount of 0.25%
Loan Amounts
$5,000 – $50,000
APR

Between 5.99% and 15%; autopay discount of 0.25%

Origination Fee

Between 0% and 5% (dependent on state and local laws)

Term Lengths

Fixed-rate loan terms of 3 or 5 years

Min Credit Score

680

1 Minute Review

Figure’s online personal loan application process eliminates the painstaking process of following up your paperwork to scan or send to the lender. With an entirely online application, you can get your prequalification rate without impacting your credit score. You’ll get approval within a few minutes and await funding in as little as 2 business days — up to $50,000 you can direct toward what matters most.

Figure personal loans come with multiple fixed term options so you can map out your payment schedule so that it doesn’t strain your finances. Figure also offers some perks for spreading the word out to others. You’ll receive a $150 gift card for every friend you refer, and they too will get a $150 gift card when their loan funds.

Figure’s home equity line of credit lets you turn your home equity into up to $250,000 cash in as few as 5 days. Rates start as low as 2.88% APR1, and you can choose among 5-, 10-, 15- and 30-year fixed term options. You can also get up to $500,000 cash-out in mortgage refinance, all with custom rate and payment options.

While you can easily land better rates with a higher credit score, Figure also has options for applicants with less than perfect credit. You may secure a HELOC with a credit score as low as 620 (except in Oklahoma where the minimum is 720).

Best For
  • Online loan application
  • Unsecured loans
  • Affordable loan fees
Pros
  • 100% online application
  • Quick funding
  • Competitive rates
  • Stellar customer service
  • Multiple fixed term loan options
  • A gift card for every referral (personal loan only)
  • Personal loan offered in all 50 states
Cons
  • Products not available in some states
  • Personal loans capped to $50,000
get started securely through SoFi’s website
Disclosure: Fixed rates from 6.99% APR to 21.78% APR. APR reflect the 0.25% autopay discount and a 0.25% direct deposit discount. SoFi rate ranges are current as of 3/24/22 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. Lowest rates reserved for the most creditworthy borrowers. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, income, and other factors. See APR examples and terms. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.
APR
9.95%-35.99%
Loan Amounts
$2,000-$35,000
APR

9.95%-35.99%

Origination Fee

Up to 4.75%

Term Lengths

24-60 months.

Min Credit Score

580

1 Minute Review

Established in 2012, Chicago-based Avant helps people obtain personal loans while offering transparent credit. Since its inception, Avant has helped over 1.5 million people receive funding. 

One thing that makes Avant so unique is its background as a financial technology company instead of a traditional bank. Banking needs are addressed by Evolve Bank & Trust, a member of the Federal Deposit Insurance Corp. (FDIC). The FDIC insures deposits and protects consumers in case of bank disasters. Benzinga’s review of Avant determined it is a strong option for personal loans because of its reputation for positive customer experiences and fast funding options. 

Best For
  • People with below-average credit scores who need unsecured personal loans
  • People who need fast funding
Pros
  • Quick funding
  • Fixed payments
  • Mobile accessibility
Cons
  • Additional costs such as origination fees
  • No third-party guarantor such as a co-signer on a secured personal loan
Disclosure: *AutoPay discount is only available prior to loan funding. Rates without AutoPay are 0.50% points higher. Excellent credit required for lowest rate. Rates vary by loan purpose.
APR
3.49%- 19.99%
Loan Amounts
$5,000 – $100,000
APR

3.49%- 19.99%

Origination Fee

$0

Term Lengths

Up to 240 months

Min Credit Score

660

1 Minute Review

LightStream was founded by its parent company Truist Financial. The company offers a wide range of traditional and innovative personal loan benefits and opportunities such as home improvement loans and fertility financing to address a wide range of needs. The company charges APRs between 3.49% and 19.99%. Benzinga offers a review of LightStream’s personal loan options that provide a variety of personal loans while minimizing additional fees and promoting financial flexibility. The company offers diverse loans with varying term lengths, APRs, and uses. For example, Lightstream offers a variety of home improvement loans that are designed to assist with specific needs such as funding for landscaping or solar panels.

Best For
  • Potential borrowers interested in quickly funded unsecured personal loans
  • Same day funds
  • People with stronger credit scores
Pros
  • Doesn’t require collateral
  • No late fees
  • Potential same day funding
  • Self-selected funding dates
  • Offers a mobile application to ease access to loan information
Cons
  • Not recommended for bad credit scores

Types of Personal Loans for College Students

You can generally think of personal loans as general use loans paid off in installment plans. But there are certain characteristics that individuate one type of personal loan from another, each of which has its benefits depending on your financial situation. 

Learn more about the most common personal loans to figure out which is best for you.

Secured Loans

If you’re approved for a secured loan, the lender is asking that you put up collateral to back the loan. This could be in the form of an asset like your home or car, or with a bank account. A lender may offer a secured loan if the loan is very large or if something in your credit history is perceived as troublesome but not necessarily a deal-breaker for a lender.

Because a secured loan reduces risk for the lender (your collateral could be seized if you default on your repayments), you take on more personal risk. Be sure you can meet the terms of the loan before you agree with it to avoid trouble.

Unsecured Loans

If you don’t have an asset to offer as collateral, look for unsecured loans. These are the preferable options for most borrowers, especially if the amount you need to borrow is relatively low. These loans are typically offered to borrowers with good credit that marks them as low-risk. 

Although you take on less personal risk in theory with these loans, the integrity of your credit is on the line. It is important to meet the terms of your loan so your credit score isn’t impacted negatively. This will ensure that you will save money by qualifying for low interest rates and favorable terms when using credit in the future.

Fixed-Rate vs Variable-Rate Loans

A loan with a fixed rate is usually preferable to a variable rate loan. Your interest rate remains static throughout the lifetime of your loan, so you know exactly how much the loan will cost you overall. The only real downside is that fixed rates can be higher than variable rates. Lenders issue high rates to ensure the loan is profitable for them. Monthly payments may be also higher.

A variable rate loan may be a better option if your circumstances require that you conserve cash now. A variable rate loan may have smaller monthly payments with a lower interest rate. This could be of interest to cash-strapped college students or people working full-time while going to school. 

Spending a little more on the loan may be worth the peace of mind of financial security throughout your education, especially if you think the investment in your education will net you a worthwhile return in the form of an income increase.

Personal Loan Requirements and Criteria

Reach out to a lender to find out their specific requirements, but use the following as a general guide for personal loan borrower requirements:

  • Your FICO credit score
  • Debt-to-income ratio
  • Delinquencies or negative remarks on your credit report
  • Credit utilization (your credit balance vs. your credit limit)
  • Open accounts with a positive standing (payments being made on time and the like)

A loan comparison service like Credible can also cut down time researching borrower requirements from individual lenders. By prequalifying, you can see which lenders’ standards you meet and go from there. 

Personal Loan Considerations

If you’re a college student who can’t get federal aid or are a non-traditional student ineligible for financial aid, a personal loan is a worthwhile consideration. Consider a personal loan an investment and weigh the financial return possible. 

Don’t take out a loan if it’ll cost you more than it was worth in the end. And if you’re not sure you’ll be making enough to pay the monthly payments while you’re still in school, it may not be your best bet. 

Be 100% positive you can meet the loan terms before agreeing to anything. Even 1 missed payment can negatively impact your credit score and prevent you from using credit in the future.

Always be sure to watch out for sketchy lenders, especially online. It’s best to use industry-vetted lenders like SmarterLoan.com

A loan comparison service such as Even will link you with lenders with established records of trustworthy lending. You’ll be able to view your individual offers and safely compare their rates and terms without hurting your credit report.

Personal Loans vs. Credit Cards

Personal loans and credit cards are both useful when you need access to more spending power, but 1 can be more beneficial than the other in certain situations.

If you’re looking to fund a large expense, a personal loan may be your best bet because it’s 1 lump sum payment. Because personal loans usually offer low-fixed rates, they are often a great way to consolidate debt under a lower interest rate as well. 

The personal loans from Payoff are a perfect example of this — they’ll give you enough money to pay your debtors and you’ll pay 1 streamlined monthly payment instead of keeping track of several payments.

Credit cards are a revolving line of credit, while personal loans have a set repayment term. When you pay down your credit card balance each month, your available credit is increased by that amount.

A credit card is best for covering smaller daily or recurring expenses because they tend to have higher, variable rates, so you don’t want to get buried under high balances. Credit cards can help your credit by increasing your credit age (the average length of your positive credit relationships) if you keep them open and pay them off regularly.

Alternative Funding for College Students 

If you’re a student who needs an alternative to federal or private student loans, consider a personal loan. Determine your financial needs, and contact our recommended lenders or loan comparison services to explore your personal loan options today.