As a college student, you don’t have many options when it comes to loans. Most of the top personal loans on the market require great credit and a steady income, which typically aren’t a student’s strong suit.
If you’re considering a personal loan, take the time to explore all of your options. More importantly, ask yourself why you need it and whether a personal loan is right for you.
Before applying for a personal loan, a student should consider the return on investment of the loan.
How applying for a personal loan as a student is different
Unless you’re an authorized user on a parent’s credit card or you’ve already taken out a loan, it’s likely that you have limited or no credit history. As a result, you won’t have many great options to choose from.
What’s more, even lenders that specialize in bad credit or no credit loans require that you have a decent income. This means that if you’re working just a few hours a week or not at all, you’ll have a tough time getting approved on your own.
“Some lenders may look at alternatives to your credit history, such as current employment,” says Robert Farrington, founder of The College Investor. “They may also consider a cosigner or allow collateral, such as a vehicle.”
Not all lenders allow cosigners or secured personal loans, though, so you’ll need to do your research to find one that will accommodate your needs.
Should you get a personal loan or student loan?
Before you start shopping around for a personal loan, it’s essential to consider whether you need one at all. If, for instance, you’re looking to cover school-related costs, a federal or private student loan is almost always the best solution.
- Tuition and fees.
- Room and board.
- Textbooks and supplies.
- Transportation to and from school.
If you need money to cover other expenses, it may be worth considering a personal loan as long as the reason is sound. “Before applying for a personal loan, a student should consider the return on investment of the loan,” says Farrington.
“Is it worth borrowing for this reason? Will I see a return on my borrowing? If not, maybe consider alternative ways to pay, or simply avoid the expense to begin with.”
5 personal loans for students
If you believe that a personal loan is the best option for your situation, here are five top lenders to consider.
LendingClub personal loans are typically a better fit for someone with good or excellent credit. But the good news is that they allow you to add a cosigner, which can help you score more favorable terms on your loan.
The lender’s APRs are reasonable, but watch out for an origination fee. LendingClub also offers relatively long repayment terms compared with some of the other lenders on our list.
You can get a small-dollar loan or a bigger loan if you need it.
Check out SuperMoney’s LendingClub review page to get all the details.
LendingPoint loans are designed for people with fair credit, so you may qualify if you have a limited credit history and a decent score. That said, the lender has a minimum annual income that may require full-time work.
The lender does charge an origination fee, but not on all of its loans. And while the low end of its APR range isn’t as low as LendingClub, it’s still reasonable for someone with fair credit.
One thing to keep in mind is that LendingPoint doesn’t operate in all 50 states, so check before you apply to make sure you’re eligible.
Learn more about the lender on our LendingPoint review page.
Avant requires an even lower credit score than LendingPoint, giving more students a chance to get approved.
That said, the lender’s minimum income requirement is the same as LendingPoint’s, making it difficult to get approved without a decent job.
Avant’s APR range is competitive with even some good-credit lenders. But it does charge an origination fee on some of its loans. Depending on the size of your loan and your qualifications, you’ll get at least a couple of years to pay back the loan.
The lender operates in most states, but there are some exceptions.
Check out our review page of the lender to learn more.
If you’re new to credit but it doesn’t look pretty, consider NetCredit. The lender has relatively low credit requirements compared with our other top choices. As with the other lenders, however, income may be a roadblock.
NetCredit operates in just a handful of states, but you may be able to get a loan through one of its affiliates depending on where you live.
The lender’s APRs can climb into the triple digits and it charges an origination fee on some loans. As such, it’s important to consider whether the cost is worth it. Also, you may have just a few months to pay back the debt.
But if you qualify, it’s still a much better rate and repayment term than you’d get with a payday loan.
Discover more on our NetCredit review page.
Borrowers with just about any credit background can get approved for a personal loan with OppLoans. But make sure you meet the lender’s income requirements before you apply.
OppLoans APRs can be even higher than NetCredit’s, but you’re still not in payday loan territory. The lender also charges an origination fee on some of its loans.
You can potentially borrow as little as a few hundred dollars with the lender. But the maximum repayment term is just a couple of years, giving you less time to pay off your balance.
Like some of the other lenders we’ve listed, OppLoans isn’t available in all 50 states, so check before you apply.
Learn more about OppLoans on our review page of the lender.
6. OneMain Financial
OneMain Financial is an interesting option for students that have some kind of income (currently the minimum is $7,200). The minimum score is just 540 and the loans are available in 44 states.
7. Align Income Share
Align Income Share is an alternative option for students without great credit that allows you to borrow money in exchange for a share of your future earnings. Instead of paying a fixed interest rate, your payments are based on your income. If your income goes up or down, so do your payments.
8. Jora Credit
Jora Credit has easy to meet eligibility requirements for loans up to $2,600. However, they only operate in eight states and interest rates are high. See if Jora Credit operates in your state.
9. Cash Central
Cash Central is another lender with flexible eligibility criteria but high interest rates. Only consider these lenders if it is a real emergency.
10. Regional Finance
Regional Finance also offers loans to people with poor credit who need cash in an emergency. It has high interest rates and a higher than usual origination fee. Regional Finance is available in eight states.
The bottom line
Getting approved for a personal loan as a college student can be tough. But with the right lender, you could get the money you need.
Before you apply, Farrington recommends using a credit monitoring tool to check your credit score. You’ll not only see where you currently stand but also the areas where you can improve.
If you can get a cosigner or a secured personal loan, you may have a better chance of getting the loan. But if not, having solid employment and little additional debt can go a long way.