Teaching is one of the more selfless professions, as seen with the all-too-regular practice of teachers who open their own wallets to provide supplies and resources to their students. But there may be times that your generosity or needs extend beyond the money in your bank account.
If you’re a teacher and need a personal loan to cover classroom expenses or to create a teaching-from-home office (or for any reason at all), Benzinga’s got you covered. Read on to find the best personal loans and lender comparison services for teachers.
Best Personal Loans for Teachers
Teachers, while you do maintain near-superhuman status, you still experience debt, a leaking roof or the itch to take that dream vacation. Like the rest of us everyday humans, sometimes you need cash you don’t have on hand to cross something off your running to-do list.
A personal loan can be your solution when you need funding. Personal loans are usually 1-lump sum payments, repaid over a set installment plan period. Usually, you can use a personal loan for whatever you’d like. Some lenders may offer specific-use personal loans or require you to disclose your intended use to approve your loan.
Types of Personal Loans for Teachers
The type of personal loans (secured or unsecured loan or a fixed or variable rate loan) you’re offered and what you’ll ultimately choose depends on several mitigating factors:
- Your credit score
- Your loan amount
- Lender borrower requirements
Your unique financial situation may dictate that you look for a loan with a specific set of terms, like a fixed or variable interest rate, so educate yourself on the differences to suss out your best fit.
When a lender offers a secured loan, it’s asking you to back your loan with some form of collateral. This may be an asset like your house or a savings account — something that allows the lender to recoup the funds it lent you if you were to default on the loan.
When does a lender require collateral? It’s different from case to case, but secured loans are often an option given when you need to borrow a large amount. Your lender may see something in your credit report that doesn’t fully rule you out as a borrower, but the lender may see it as potentially risky.
A secured loan reduces risk for a lender but also increases your personal risk. Your collateral could be in trouble and seized as payment if you find yourself unable to repay the loan, so always be sure you can meet the terms of a loan before signing for it.
While unsecured loans are usually preferable because your credit history only backs the loan, you do take on significant personal risk. You aren’t at risk of losing any collateral, but your credit will take a huge hit if you default.
Unsecured loans are commonly offered by lenders if your loan amount is relatively low or if you have solid credit that demonstrates you are a trustworthy borrower.
Fixed-Rate vs. Variable-Rate Loans
A lender will either offer you a fixed or variable rate, or allow you to select from either. This refers to the interest rate that applied throughout the duration of the loan.
While each has its place, there are some benefits and drawbacks to each. A fixed-rate is beneficial because it allows you to calculate exactly how much interest you’ll pay on a loan, so you know the true cost of borrowing before you agree to anything.
Fixed interest rates may be higher, have higher monthly payments, or both, ensuring that a loan stays profitable for a lender. But these are minimal drawbacks compared to the money you typically save by choosing a fixed-rate loan.
When would a variable rate loan make more sense? If your financial situation necessitates you to have access to more cash now, you may prefer the lower payments and rates even if you have to pay more in the long run.
Personal Loan Requirements and Criteria
A potential lender can usually give you an exact idea of their specific requirements and criteria, but you can basically count on the following to hold true for most personal loan approvals:
- 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
Some lenders may offer special loan considerations for teachers, like rate discounts and so forth. Some will even work with imperfect credit. Services like BadCreditLoans.com will connect you with lenders willing to consider your application even if your credit isn’t quite up to snuff.
While they often cap personal loans at $1,000 for borrowers with bad credit, even these small loans can be of great service — both to your bank account and your credit history if you keep up your end of the repayment agreement. This will begin to establish that you are a trustworthy credit user, opening up more avenues to funding along with better rates and terms in the future.
If you’re pretty sure your credit meets standard borrower requirements, you should use a free loan comparison service like Credible. Instead of visiting a million different lenders and clicking back and forth between tabs to compare offers, you can see all your prequalified loan offers side-by-side. This will help you pick your most suitable offer — without risk to you or your credit history.
Personal Loan Considerations
The biggest thing you should pay attention to when considering a personal loan is to make sure its terms and conditions are feasible for you to meet. If taking out the loan will put too much pressure on your finances in the future, you may need to rethink it.
That being said, do your due diligence to make sure you’re getting the best rates and terms. Look for personal loans with minimal fees and prepayment penalties. You’ll face fewer surprise expenses with more flexible repayment terms.
Stick with trusted companies like SmarterLoan.com to ensure you’re dealing with a vetted loan service.
You can also use a service like Even for a buffer against fraudulent or sketchy lenders. Even only partners with vetted lenders, so you can shop around without having to research the background of every lender you interact with.
Personal Loans vs. Credit Cards
Personal loans and credit cards both add some “oomph” to your spending power in the form of a line of credit. But while they are similar in certain ways, their differences make them uniquely useful in certain situations.
Personal loans are often best for large expenses, both of the planned and emergency variety. They can provide a cushion at a low-interest rate, making it a potentially smarter decision than dipping into savings you have in an interest-bearing account. They also often offer a higher credit limit than credit cards, so this makes them more ideal for large expenses as well.
Personal loans are also a better option for debt consolidation. For example, Payoff offers loans structured around the amount you owe to creditors. You can pay off each account, rolling multiple payments into 1 monthly installment plan payment.
Because personal loans tend to offer lower rates than credit cards, this is a cost-efficient way to consolidate debt and streamline your finances while boosting your credit — you’ll lower your credit utilization by paying off multiple debts and raising your overall credit limit.
Personal loans are closed-end credit. Your payments only go toward repaying the loan, not restoring available credit. With credit card payments, your owed balance will lower while your available credit is restored in that amount. Because credit cards are revolving lines of credit, they’re perfect for small purchases you can pay off quickly. They’re also useful for recurring purchases.
Get Funding Fast
A personal loan can be the solution when you’re trying to make ends meet but don’t have the cash to do so. If your situation makes sense for a large lump-sum payment that you can pay back in fixed monthly payments, any of the lenders or loan comparison services on our list can help you out.
Get in touch with a lender today to prequalify and start the process of getting the funding you need as soon as possible.