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Best Personal Loans for Students in 2020

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. This article may focus on the best personal loans for students, but you shouldn’t rush into an unsecured personal loan.

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. 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.

You can get federal loans regardless of your credit history or income. All that’s required is that you fill out the FAFSA and are enrolled at an eligible college or university.

Student loans typically have lower interest rates and more flexible repayment terms than personal loans. With federal loans, for instance, you can extend your repayment term to 20 years or more.
With a personal loan, on the other hand, you may need to pay off your balance within a few months to a few years. And unlike student loans, personal loans don’t allow you to push off payments until you’re done with school.

Finally, some personal lenders won’t allow you to use personal loan funds to cover education costs.

On the flip side, federal student loans are typically designed for certain eligible expenses, including:

  • 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.

Ask yourself if it’s 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.

Personal loans for students

If you believe that a personal loan is the best option for your situation, here are our some top lenders to consider. However, notice that most lenders have significant minimum annual incomes that will disqualify most students. Our list prioritizes lenders who accept cosigners, have flexible eligibility requirements, and competitive interest rates.

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.

LightStream is another prime lender which is out of reach for most students. Its target audience is borrowers with excellent credit and large incomes. However, it will consider students who have a cosigner. So if you have a friend or relative with great credit and a substantial income, there is a chance you can qualify. LightStream does not charge an origination fee and has some of the lowest rates for unsecured loans around.

Upgrade has a minimum income that might preclude most students but it does accept joint applications. The minimum credit score is low compared to similar lenders and it comes highly recommended by borrowers. However, don’t forget to include the origination fee when comparing its total cost with other options.

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. Another big advantage of OneMain Financial is that it also accepts cosigners, which increases the chances of students with low income (or no income) to qualify.

Our review on OneMain Financial covers them in-depth.

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 qualify 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.

Personal loans for emergencies

As mentioned above, finding a personal loan when you’re a student is not easy. If you don’t qualify for the lenders above, you may be tempted to apply with lenders that have more flexible credit requirements. However, just because you can qualify for a loan doesn’t mean you should. The lenders below target borrowers with poor to fair credit and their rates reflect it.

Remember these lenders will still need proof you have the income to repay the loan.

If you’re looking for competitive rates and low credit requirements, consider NetCredit. The interest rates are high, but still very competitive when compared to lenders in this credit bracket. 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.

The bottom line

Getting approved for a personal loan as a college student can be tough. If you don’t have a large income or great credit, expect high rates and low loan amounts. But with the right lender, you could get the money you need. Don’t rush into getting a loan. There may be alternatives, like federal student loans or private student loans, that over better rates and terms.

Before you apply s 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 — even if it’s part-time — and little additional debt can go a long way.

Take your time as you shop around for a loan. Find your best offer from competing lenders and compare it to other top personal loans to get the best deal for you.