Personal loans are the fastest-growing category of debt in the United States today. In fact, more than 38 million Americans currently hold a personal loan, and the total bill has now reached $305 billion nationwide. When used responsibly, personal loans are a great way to purchase a new car, cover those long overdue home improvements, and deal with emergencies when life decides to throw a curveball your way.

Whatever your reasons for taking out a personal loan, though, we understand just how stressful the process can be. Many first-time borrowers turn to their banks in the first instance but can be put off or intimidated by the mountains of paperwork they need to complete and the long waits before the money is in their pocket.

There has been an explosion of third-party lenders in recent years and the personal loan market has been cracked wide open. Borrowers have more choices than ever when looking for a personal loan, and we’re here to guide you through the options, advantages, and risks of using a third party lender. We’ll also answer any questions you might have about personal loans along the way.

Frequently Asked Questions(FAQ)

What is the difference between federal and private student loans?

This is one of the most important distinctions to make when you’re looking for student loans and can have big implications. Federal student loans are offered directly by the US government, and their terms, conditions, and interest rates are usually defined by federal law.

They also have some benefits, such as income-driven repayment plans and student loan forgiveness programs, that are not available with private loans.

Private student loans, on the other hand, are offered by private institutions such as banks and lenders. These loans have a lot more variance in terms of interest rates, repayment terms, approval rates, and conditions.

This means that you’re getting a different deal from each private lender, but you have a greater chance of getting favorable conditions for your loan.

Will I need a cosigner for private student loans?

The short answer is “not necessarily, but yes”, though that depends on a few different factors.

In general, most student lenders prefer, or require (in many cases), that you have a cosigner. This is because when you’re first applying for a student loan (when you’re 18), you’re not likely to have a credit score yet to define your loan terms.

Moreover, 18-year-olds are not likely to have a steady income out of high-school, so lenders are not able to ensure they’ll be able to pay back their obligations. 

Recent statistics show that nearly 90% of all student loans are cosigned, so odds are you’ll likely need one too. Even so, if your parents or guardians can’t cosign, you can still find a loan that may be good for you.

To do so, you’ll need to have some sort of credit history (taking out a credit card and paying it back consistently is a start), as well as to prove you have a steady income to repay your debt. 

Can I still get a student loan with bad credit?

Credit scores are one of the most important criteria for any loan application, and they can make or break your approval in some cases. However, having a poor credit score isn’t the end of the world if you’re looking to get a student loan.

Most private student loans reviews will quickly let you know which companies are better for bad credit borrowers.  One of the most common workarounds is to have a parent or trusted adult cosign the loan for you (although this carries its own risks, and you should always be careful).

Alternately, there are some student loan providers that are willing to work with lower credit scores, though this may affect the interest rates or terms you’re able to get for your loan. 


I have too many student loans to keep track of; how can I simplify my payments?

This is a common problem for many students as most lenders will only extend you a loan for a single school year (or even term, in some cases). Even worse, the same lender may not approve your loan twice, requiring you to have multiple loans open.

This can affect your ability to pay, as each loan may have different rates and terms. 

One of the most common solutions is student loan consolidation, in which you take out a single loan that covers the cost of all your active loans. This helps you bring all your debt under a single institution and gives you a single interest rate to worry about.

Most student lenders also give you the option to refinance your existing loans to a more favorable rate. 

I graduated recently but can’t find a job and will fall behind on my payments. What can I do?

It’s one of the most heard-of stories when it comes to student loans, but the job market isn’t what it used to be, and it can be hard to find employment. Even so, your debt obligations are not going anywhere, and in fact, are growing.

Luckily, many of the best student loan providers are happy to work with borrowers on repayment, as it’s in their best interests to get paid. 

Most lenders offer a grace period of 6 months to a year for recent graduates, where you don’t have to worry about loan payments.

If you’re past that point, and still unemployed or financially restricted, you can talk to your lender about student loan forgiveness. While this isn’t guaranteed to work (you can’t just wish away debt), many lenders have programs to help borrowers work toward paying their debt responsibly and sustainably.

Alt Text