At a Glance

To avoid any confusion, we are not talking about using personal loans to pay for college tuition. Most lenders don’t allow that, even if the student could qualify for the amount needed for it. If tuition money is your intent today, please research student loans, not personal loans for students. The latter has a very different purpose than the former.

What is a personal loan?

A personal loan is a financial agreement between a lender and a borrower. The lender agrees to give the borrower a certain amount of money which will be paid back in fixed monthly payments over the course of an agreed upon period. It’s called a “personal” loan because repayment is the personal responsibility of the borrower.

There are two types of personal loans, secured and unsecured. The loan is secure when the borrower puts up collateral, also known as security, to guarantee repayment. An unsecured loan, which is more common, provides the lender no collateral. The decision to approve unsecured loans is based on the credit score of the borrower.

Lenders make money off this agreement by charging interest on the amount borrowed. Interest is described in a loan agreement as annual percentage rate (APR) financing charge. The amount of interest charged is based on current market conditions, the prime rate set by the banks, and the credit score of the borrower. Those with lower scores pay higher rates.

Learn more: Everything You Need to Know About Personal Loans

How can you use a personal loan for college?

Personal loans don’t generally come with spending stipulations, but most lenders forbid the use of them to pay educational expenses like tuition. Students who take out personal loans use them for more practical needs like groceries, rent, a personal laptop, or unexpected emergencies. In this way, personal loans can help you get through college.

Pros & cons of personal loan for college

Pros Cons
Instant Cash for Expenses Potentially high interest rates
Fixed monthly payments Taking on new debt
Build credit history Could hurt credit score

The benefits of getting a personal loan while in college are that you get instant cash to cover expenses, fixed monthly payments that are easy to budget, and a chance to build credit history. On the downside, interest rates may be high if you’re just starting out, new debt is a burden you’ll have to carry, and defaulting on the loan will hurt your credit score.

How to compare lenders for personal loans for students

Some lenders advertise personal loans for students. That doesn’t mean they are the best place to get a loan if you’re putting yourself through school. Compare lenders based on interest rate, terms, conditions, and convenience. Online lenders often charge lower interest rates than traditional banks, so make sure you include them on your loan shopping list.

Alternatives top personal loans for student’s

Students always need cash. It’s part of the rite of passage known as college life. Getting a personal loan is one way to get that cash. Another is to find a part-time job or side hustle to work on while in school. A third is to apply for a credit card, but you’ll need the job if you choose that route. Credit card interest rates are even higher than loan interest rates.

Personal loans for student’s with bad credit

Bad credit means that your credit score is lower than 680. That can happen when you mismanage credit accounts, but your score could also be low because you don’t have enough credit history. Lenders look at these two scenarios differently, so bad credit doesn’t necessarily disqualify you from getting a loan. Shop around for lenders who will do business with you.


Student loans are in a category by themselves. They are personal because they’re lent to an individual, but the “personal loan” category for lenders is used to describe secured and unsecured loans that do not have specific spending criteria.

Learn more: Student Loan vs Personal Loan

Student loan lenders are subject to federal regulations that don’t apply to other types of personal loans. The use of student loan funds is strictly regulated. They can only be used for educational expenses like tuition and books.

Personal loans can range from $1,000 to $100,000, but how much you qualify for depends on the lender, your credit score and history, income, and other factors. Some lenders may cap their loan at $10,000 or $50,000 but check with different types of lenders to learn your options.

You should only borrow the amount you need. For example, if your apartment’s rent, books, and other expenses total $5,000 per year, you should only borrow $5,000. This ensures you don’t borrow more and must pay more in interest over the life of the loan. Or only borrow what you can repay. Use a loan calculator to estimate your monthly loan payments and be sure it fits in your budget.

Yes, most lenders require a credit score of at least 600 and an established credit history to qualify for a personal student loan. However, you can also use a cosigner who has an excellent score and history to help you qualify.

If you have a credit score of at least 600 or higher, an established credit history, and proof of income, you likely won’t need a cosigner for your personal loan. However, a cosigner can help you get a better interest rate and loan term, so it may be something you want to consider.

Related: Personal Loans With a Cosigner