Is it a Good Idea to Pay Off Student Loans with a Personal Loan?
If your student loan debt is getting you down, you may be looking for any solution to make the payments more manageable. One often-overlooked option for dealing with student loan debt is taking out a personal loan. Taking out a personal loan to pay student loan debt may not be the best option for some. To help you determine if it’s a good option for you, we’ve listed some pros and cons of using a personal loan to repay student loan debt:
- A personal loan may allow you to consolidate your student loans leaving you with only one monthly payment to keep up with.
- You may be able to access a personal loan with a lower fixed-rate than what you have with your student loans.
- A personal loan can provide you with a fixed interest rate as well as a fixed repayment period.
- If you have a cosigner on your student loans, repaying the student loan with a personal loan would release your cosigner from their obligations.
- A personal loan can be discharged in bankruptcy, unlike the majority of student loans.
- The interest on a personal loan is not tax-deductible like it is with student loans.
- Personal loans don’t offer benefits like deferment or forbearance as federal loans do.
- The personal loan lender may have a limit to how much they allow you to borrow.
- The personal loan rates offered to you may not be lower than your student loan rates.
A Final Word
There are a myriad of options for you to consider when looking to make your student loan debt more manageable. Whether or not a personal loan is the best option for you will depend on your credit history, your financial situation at the moment, and what you’d like your financial situation to look like down the road. If you decide to go forward with a personal loan, you can fill out our hassle-free application form here.