How to Get a Personal Loan When You Have Student Debt

how to qualify for a personal loan

If you’ve applied for a loan before, you know how painful the underwriting process can be. But it’s even more stressful if you’re trying to figure out how to qualify for a personal loan when you already have student debt.

Student loans will show up as debt, which can affect how lenders rate the risk of giving you a personal loan. That’s why it’s important to figure out, “Will I qualify for a personal loan — even with my student debt?”

Knowing the personal loan qualifications you’ll need to meet can help you decide whether to apply for this type of debt or not.

How to qualify for a personal loan with student debt

When deciding whether to approve you for a personal loan, a lender is most concerned with your ability to repay it. They want to see that you’re in a financial position to affordably cover your monthly payments.

This means lenders will definitely be taking a look at your debts — including student loans. But how a lender views your student debt will depend on a few factors.

Review your debt-to-income ratio

A lender’s first concern is how much student debt you have, and how it compares to your income. This, along with other debts you have, will determine your debt-to-income ratio (DTI). Simply put, this is the percentage of your monthly income that is spent on debt repayment each month.

For a monthly gross income of $2,000, for example, a $200 student loan payment plus a credit card minimum of $100 would give you 15 percent DTI. Lenders usually like to see a DTI of around 36 percent or less.

The higher your income, the better your DTI will be. Having small student loans and low student loan payments will also be an important factor in lowering your DTI.

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Use the calculator below to find out your DTI.

Debt-to-Income (DTI) Calculator

Check your credit score and report

A decent credit history is also a key factor in how to qualify for a personal loan. This is a case in which student loans can actually help you qualify for a personal loans.

If you’ve made on-time payments on your student loan for the past few years, this will show you’re a responsible borrower. It can be a positive mark on your credit report and even boost your credit score.

Typically, lenders like to see at least an average credit score, usually in the upper-600s for FICO scores. However, borrowers with FICO scores in the 700s are more likely to qualify for a loan and will get the best personal loan rates.

Lenders might also have other credit requirements for personal loans. Some might expect a minimum credit length, like Payoff’s minimum credit length of 3 years.

What’s more, some lenders will reject a personal loan applicant if they have a recent delinquency. This makes it all the more important to carefully track all student loans and ensure you never miss a payment.

Consider your education or career experience

Having student debts might give you a higher DTI, but those student loans also made it possible for you to gain a degree and boost your earning potential. More lenders are considering factors such as your level of education and career experience when evaluating personal loan qualifications.

For instance, SoFi prefers borrowers who have an established career. Other lenders favor personal loan applicants who have completed a bachelor’s degree.

Increase your chances of approval

Based on the factors above, you probably already know the answer to “Will I qualify for a personal loan?” If it looks like you’d meet personal loan qualifications with your student loans, you can probably start getting rate estimates and shopping for the best lender.

But if you fall short in some areas or have already been rejected for a personal loan, there are some things you could try to improve your chances of approval.

If your debt-to-income ratio isn’t favorable, you’ll need to either earn more money or lower your debt payments. You could also consider refinancing student loans to lower your monthly payments — and, in turn, your DTI.

Maybe your credit score or credit reports are the problem. What if you missed a student loan payment or rehabilitated a defaulted student loan?

If this is the case, don’t automatically give up on a personal loan. Many lenders have flexible lending standards, making it possible to get a personal loan with bad credit. You can also focus on repairing your credit and try re-applying in a few months.

When it comes to personal loan qualifications, student debt can both hurt or help your chances of approval. It’s possible, and even common, to qualify for a personal loan when a borrower already has student debt. It all comes down to how you’ve handled your student loans, and how that behavior is viewed by lenders.

Ready to apply for a personal loan? Check out 9 common mistakes borrowers make when getting a personal loan.

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LenderRates (APR)Loan Amount 
1 Includes AutoPay discount. Important Disclosures for SoFi.

SoFi Disclosures

  1. Terms and Conditions Apply: SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Finance Lender Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (
  2. Personal LoansFixed rates from 5.49% APR to 14.24% APR (with AutoPay). Variable rates from 4.98% APR to 11.44% APR (with AutoPay). SoFi rate ranges are current as of December 21, 2017 and are subject to change without notice. Not all rates and amounts available in all states. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, years of professional experience, income and other factors. Interest rates on variable rate loans are capped at 14.95%. Lowest variable rate of 4.98% APR assumes current 1-month LIBOR rate of 1.34% plus 3.89% margin minus 0.25% AutoPay discount. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.

2 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  1. Personal Loan Rate Disclosure: Fixed interest rates range from 5.99% – 16.24% (5.99% – 16.24% APR) based on applicable terms and presence of a co-applicant. Lowest rates shown are for eligible applicants, require a 3-year repayment term, and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
  2. Loyalty Discount: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower has a qualifying account in existence with us at the time the borrower has submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, student loans or other personal loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI and VT. This discount will be reflected in the interest rate and Annual Percentage Rate (APR) disclosed in the Truth-In-Lending Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan, and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  3. Automatic Payment Discount: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their Citizens Bank Personal Loan during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account two or more times within any 12-month period, the borrower will no longer be eligible for this discount.
7.39% - 29.99%$1,000 - $50,000
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4.98% - 14.24%1$5,000 - $100,000
Check rate nowon SLH's secure site
8.00% - 25.00%$5,000 - $35,000
Check rate nowon SLH's secure site
5.99% - 16.24%2$5,000 - $50,000Visit Citizens
5.99% - 35.89%$1,000 - $40,000Visit LendingClub
5.25% - 14.24%$2,000 - $50,000Visit Earnest
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