Should I Use a Personal Loan to Pay Off My Student Debt?

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Written by: Contributor | Best Company Editorial Team

Last Updated: April 13th, 2020

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Many graduates are finding themselves deep in their student loans and are searching for ways to help pay them off quicker. One option they are discovering is to use small personal loans to payoff and save on high-interest loans. The personal loan is a way to pay off the higher interest loans under new and more favorable conditions. Huffingtonpost has come up with thes following advantages and disadvantages:

Advantages

  1. You may have access to a lower fixed rate loan by using a personal loan.
  2. Personal loans usually have shorter payoff periods if your goal is to pay off your loans as fast as possible.
  3. Your student loan can be combined into one convenient payment.
  4. You can release any cosigners you have on your student loans. If you qualify for the personal loan on your own, the person who cosigned for your student loans will not be obligated on your new loan.
  5. Unlike most student loans, a personal loan is dischargeable in bankruptcy

Disadvantages

  1. Could lose the benefits of forbearance and deferment options on federal loans
  2. Most lenders have a limit on loan amounts for personal loans and if you have new credit a lender may not feel like you have sufficient credit history to warrant a high loan amount
  3. No tax benefits on a personal loan

A personal loan could be a great option to help pay off your student loans. There are lenders that offer personal loans just for that purpose. Find out all your options of how to repay your loans and discover which option is best for you.

The Top Personal Loans Companies

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#1 Best Egg chevron_right
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4.9
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#2 FreedomPlus chevron_right
7.0 Overall Score
4.6
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#3 SoFi chevron_right
6.8 Overall Score
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