09/19/2021 What to know about personal loans for college studentsIt’s possible to take out a personal loan for school expenses. But it’s almost never a better option than a student loan. (iStock)When financial aid, grants, and scholarships don’t cover the full cost of your college education, federal student loans should always be your first borrowing option. But if federal student loans, which have borrowing limits, aren’t enough, you may be wondering if you should get a personal loan or a private student loan to cover any shortfall.While you may be able to get a personal loan with strong credit, steady income, or a cosigner, personal loans are almost never a better option than a private student loan. This guide will help you understand the advantages of a student loan over a personal loan when it comes to paying for college-related expenses. Can I get a personal loan for school expenses?People consider personal loans for a number of reasons. Personal loans usually have lower interest rates than credit cards. And they’re flexible, meaning you can use them for virtually anything — even school expenses.While it may be possible to get a personal loan as a student, it probably won’t be easy. Most personal loan lenders require good credit, stable employment, and steady income. Credible makes it easy to research private student loans and compare rates from multiple lenders.Advantages of student loans for school vs. personal loans for studentsThe largest benefit of using student loans instead of personal loans as a student is that student loans typically offer lower rates. In fact, personal loan interest rates are usually in the double digits, while student loan rates are typically well under 10%. By choosing a student loan, you can potentially save thousands of dollars in interest. Also, student loans are much easier to qualify for with no income or poor or no credit history. And they have flexible repayment options and longer repayment terms. If you take out a student loan, you may have up to 10 years to repay it. A personal loan, on the other hand, will likely need to be paid back within one to five years. Why you don’t need a personal loan for school: You can pay living expenses with student loans The costs of college go far beyond tuition, housing, and school supplies. When your school decides how much you can borrow, it’ll look at what’s called "the total cost of attendance." This typically includes things that might not seem directly related to school, like personal expenses and transportation.This means that once you’ve paid your tuition, housing, books, and other direct school expenses from your student loan funds, you can use any remaining money to cover personal expenses — even something as ordinary as groceries for your dorm room.The difference between personal loans and student loansHere’s a closer look at how personal loans and student loans work, as well as how they differ. Personal loansWith most personal loans, you get a lump sum of money upfront. You pay it back through monthly payments over an agreed-upon term, which can range from a few months to several years or more. Personal loans can help pay for school expenses, car repairs, medical bills, vacations, or any other expenses. But it can be difficult to get approved for them, unless you have good credit and consistent income.Most personal loans are unsecured — meaning you don’t have to put up collateral to get the loan. Some, however, are secured, which means you’ll need collateral in order to get the loan.Personal loan interest rates can be high, depending on your credit. For example, in the week of Aug. 30, 2021, five-year fixed-rate personal loans averaged 16.51% for borrowers with good credit (720 or higher) who used the Credible marketplace to select a lender.Student loansStudent loans are designed to help students cover the cost of school-related expenses. Even though they can only be used for school, they’re usually easy to get, even if your credit isn’t in the best shape or you lack income. Federal Direct Loans should always be your first borrowing option for school costs. If federal Direct Loans don’t cover all your expenses, you can opt for private student loans. Interest rates for private student loans tend to be lower than personal loans. For example, in the week of Aug. 30, 2021, 10-year fixed-rate private student loans averaged just 5.29% for borrowers with good credit who used Credible. Federal student loans to considerIf you need a loan for school-related expenses, always exhaust your federal student loan options first. These include:Federal Direct Subsidized Loans Federal Direct Subsidized Loans are for undergraduate students with a financial need. If you’re eligible for them, the government will cover the interest during certain time periods, like when you’re enrolled in school at least half-time, and a six-month grace period after you leave school. Federal Direct Unsubsidized Loans Federal Direct Unsubsidized Loans are a lot like Federal Direct Subsidized Loans, but they’re available for both undergraduates and graduates. You also aren’t required to demonstrate financial need to qualify for them. With Federal Direct Unsubsidized Loans, you’re responsible for paying all the interest on the loan. Federal Direct PLUS LoansGraduate PLUS Loans are for graduate or professional students, and the student is the primary borrower. Parent PLUS Loans are for parents of dependent undergraduates, and the parent is the primary borrower. These loans are designed to cover the remaining cost of education after you borrow the maximum limit of unsubsidized and subsidized loans. Private student lenders to considerOnce you’ve exhausted your federal student loan options, you may turn to private student loans. These eight Credible partner lenders offer private student loans that may help you pay for educational expenses when federal loans aren’t enough.AscentLoan amounts: $2,001 to $200,000Loan terms: Five, seven, 10, 12, 15, or 20 yearsDiscounts: Graduation reward, autopay discountFees: No application, origination, or disbursement feesCitizensLoan amounts: $10,000 to $750,000Loan terms: Five, seven, 10, 15, or 20 yearsDiscounts: Autopay discount, loyalty discount Fees: No application, origination, or disbursement feesCollege AveLoan amounts: $1,000 up to 100% of school-certified cost of attendance Loan terms: Five to 15 yearsDiscounts: Graduation reward, autopay discountFees: No application, origination, or disbursement feesCustom ChoiceLoan amounts: $1,000 to $99,999 annuallyLoan terms: Three or five yearsDiscounts: Autopay discount, graduate principal reductionFees: No application, origination, or late feesEDvestinULoan amounts: $1,000 up to 100% cost of attendanceLoan terms: Seven, 10, or 15 yearsDiscounts: Autopay discountFees: No application, origination, or disbursement feesINvestEdLoan amounts: $1,001 up to 100% of the cost of attendanceLoan terms: Five, 10, or 15 yearsDiscounts: Autopay discountFees: Late fees and returned payment charges but no application, origination, or disbursement feesMEFALoan amounts: $1,500 up to certified cost of attendanceLoan terms: 10 or 15 years (undergraduates), 15 years (graduates)Discounts: NoneFees: No application, origination, or disbursement feesSallie MaeLoan amounts: $1,000 up to 100% of school-certified cost of attendanceLoan terms: 10 or15 yearsDiscounts: Autopay discountFees: No application, origination, or disbursement feesYou can compare private student loan rates from these lenders using Credible.When it makes sense to get a personal loanWhile student loans are almost always the best option for paying for college expenses, personal loans can be valuable financial tools in other situations.After you leave school, a personal loan can be a good option for a number of uses. If you have a lot of high-interest debt, for example, a personal loan could help you consolidate it into a single, affordable monthly payment. You can also use a personal loan to pay for medical bills, home repairs, or big-ticket purchases like furniture or appliances.Source: Read Full Article Related News: A free ‘cost-cutting’ way to save over £1,000 on energy bills – ‘it’s important’ Dan Bongino provides roadmap for Republican candidates in Democrat-leaning states Universal Credit claimants could get £25 payment in very cold weather from next month Civilian Drone Use in U.S. to Get Boost in New Security Rules Pro-GOP group targets vulnerable House Democrats over push to allow IRS 'snooping in your bank account'