Can You Take Out a Student Loan for Living Expenses

Some higher education students have a really hard time managing their expenses. The ever-growing tuition fees, living expenses, and other bills can drain the money out of them. This is likely the reason why more and more students are increasingly turning to loans—both federal and private.

While student loans to pay tuition fees are common, what about student loans for living expenses? Does such a thing even exist? The short answer is… yes. This article will inform students about loans for living expenses.

Can You Take Out Student Loans for Living Expenses?

As opposed to the common belief that student loans are intended exclusively for educational purposes, you can use them for personal use as well. You need to understand that educational costs do not include tuition fees alone. There are additional expenses directly related to pursuing your education in a college or university. As a student, you will incur those costs at one point or another in your schooling career. That’s where student loans can be used.

What Can Student Loans Be Used For?

Student loans were introduced as a way for students to afford their college tuition. But things have changed since then. The U.S. Department of Education allows students to use their loan amount outside of direct education costs. The most acceptable area is housing and accommodation. Moreover, private lenders are opening up their options as well.

Every college is different and sets its own cost of attendance, which covers the cost of one academic year. This is revised every year. When calculating the cost, colleges take into account both on-campus and off-campus expenses. The one-year cost is also different for in-state and out-of-state candidates. Therefore, the loan amount varies and gets disbursed accordingly.

When taking out student loans, you’re literally borrowing money to pay for attendance fees, which does not just cover tuition fees. It covers a combination of fees which include room and board, books, supplies, transportation, and other personal expenses.

Here’s a list of what a student loan can be used for:

• Tuition
• Education-related fees
• Room and board
• Housing utilities and supplies
• Meals, groceries, on and off-campus snacks
• Books, copies, equipment
• PC or laptop for college use
• Transportation charges
• Childcare expenses (if any)
• Other personal costs associated with college

What Shouldn’t Student Loans Be Used For

Now that you know student loans can be used for paying off your additional expenses, it’s important to not get carried away with that freedom. Always remember that these are loans you will be required to pay back.

You need to understand what’s included in the additional expenses bracket. Housing, lodging, and utilities are things of utmost importance. But clubbing, Netflix, and hiking trips are not. Allowed or not allowed aside, if you invest in these activities, then you’re certainly draining the money you’ve borrowed. And it doesn’t do any good to you (or the lender or institution) and might land you in trouble later.

Here is a list of things and activities you shouldn’t fund with your student loans:

• Vacation trips
• Vehicle purchase or upgrades
• Wardrobe upgrade
• Down payments
• Clubbing, partying, and other entertainment
• Small business expenses (either on operations or growth)
• Other debts
• Other expenses completely unrelated to your current education

While not explicitly mentioned, it’s better if you stay away from the above expenses. When you run short paying for items like books and supplies, an investigation will take place. And depending upon the severity of the student loan abuse, you may face prosecution.

Personal Circumstances

Not every student on the campus leads the same personal life and enjoys the same benefits. Some may have it better, while others may be leading a difficult, challenging life while attending college. The federal government understands this and considers personal circumstances that could or will affect your ability to attend college and earn a degree.

For example, if you’re a physically-challenged person, your cost of attendance will be increased to include any special service you may require like transportation charges, wheelchairs, and personal assistance to attend college.

The loan amount will also depend on whether you’re living on-campus, at your home, or any other rental location. Off-campus students typically require a higher amount.

How to Use Federal Student Loans for Living Costs?

If you’re considering borrowing money for your college education from the government for covering your living expenses, then you’ll need to do some pre-planning. This can be a bit more complicated than borrowing money to pay solely for your tuition fees in which case you just need to borrow the amount that’s in the college brochure.

First, you need to figure out what your expenses will actually be and what amount you need to ask for. You would also need to understand what type of loan you’ll be applying for and how you’ll receive the funds.

There are two types of loans you can take out from the government.

Subsidized Loans

Subsidized student loans are the safest loan you can get for your living expenses. These are sponsored by the government and help you defer some of the interest payments. Moreover, they offer flexibility in repayment terms.

To get this type of loan, you need to first meet the required criteria and make yourself eligible.

Unsubsidized Loans

Unsubsidized loans are almost similar to subsidized federal loans but are less student-friendly. These types of loans are generally less flexible and have more rigid repayment terms.

However, there are no limitations on how much and where you can spend the money.

READ MORE: What to Do If You’re Losing Money on Unsubsidized Federal Loans

How to Apply

To get either subsidized or unsubsidized loans, as a student, you would need to complete and submit the Free Application for Federal Student Aid or FAFSA form. Your college will use the FAFSA information to calculate your family contribution towards your education.

The family contribution amount will then be subtracted from your cost of attendance and you’ll be left with the loan amount you’re eligible for.

After completing the necessary paperwork, the loan amount will be disbursed not to you but to your school’s financial aid office. After taking out the tuition fees, you’ll be given the surplus which you can then use for your living expenses.

How to Use Private Student Loans for Living Costs?

If you’re deemed ineligible for a federal loan, you have the option of taking out a private loan from a private institution. For this, you must fill out an application request for a student loan from a private lender. This is usually processed within 24 hours after which you’ll receive a verification call from the lender.

Based on the information collected, you’ll receive a personalized offer stating the amount you’re eligible for, interest rates, repayment terms, as well as other information. After signing the agreement, the amount will be transferred to your bank account for you to use. All of this is typically done in less than a week’s time. The repayment will be automatically initiated based on the agreement. But keep in mind that these loans are usually less flexible and more stringent.

Best Private Student Loans for Living Expenses

Embarking on the academic journey in higher education is an exciting phase, but it’s also accompanied by the inevitable expenses that go beyond just tuition fees. Whether it’s rent, groceries, transportation, or textbooks, these costs add up, and for many, managing them alongside tuition can be a heavy burden. To assist students in navigating this financial maze, numerous private lenders offer specialized student loans designed not just for tuition, but also for personal and living expenses during the academic years. In this section, we dive deep into some top lenders in this space, categorized based on creditworthiness, ensuring there’s an option for everyone, irrespective of their credit background. Let’s explore these lenders and what they offer.

AmOne (Best for Okay to Good Credit)

Navigating through student life can be challenging, especially when it comes to managing living expenses. AmOne presents a viable solution for students with okay to good credit standings. While tuition is often the primary focus for student loans, AmOne recognizes the significance of covering living costs, ensuring a holistic college experience without undue stress. With its expansive network of lenders, AmOne offers varied options tailored to those with a decent credit background, making the pursuit of higher education a bit more comfortable.

Check rate on website

on website

AmOne Personal Loans

4.5

Stilt’s lender ratings reflect the findings and opinions of our editorial staff. Our scoring methodologies consider a wide array of factors and data points for every lender, offering, and financial solution.

Min. credit score

600

Fixed APR

3.99%-35.99%

Variable APR

N/A

View details

Overview

• Minimum credit score: 600.
• Fixed APR: 3.99%-35.99%.
• Loan amounts: $1,000 to $50,000.
• Repayment: 1 to 7 years.

Qualifications

• Must be at least 18 years old.
• Must be a U.S. citizen or permanent resident.
• While there’s no specific income requirement, a consistent source of income is essential for the applicant.

Pros

• Suitable for individuals with lower credit scores.
• No cost for the matching service.
• Attractive loan rates.

Cons

• Acts as an intermediary, not a direct lender.
• Risk of multiple contacts from prospective lenders.
• Lack of clarity on lender details.

Spotlight Loans (Best for Bad Credit)

With Spotlight Loans, individuals can access personal loans that are designed for quick funding and flexible repayment options, catering to those in need of financial support for unexpected expenses or personal investments, regardless of their credit standing.

Check rate on website

on website

Spotlight Loans

4.8

Stilt rating

Stilt’s lender ratings reflect the findings and opinions of our editorial staff. Our scoring methodologies consider a wide array of factors and data points for every lender, offering, and financial solution.

Min. credit score

None

Fixed APR

6.63% and up

Variable APR

N/A

View details

Overview

• Minimum credit score: n/a
• Variable APR: 4.99% and up
• Loan amounts: $100 – $5,000
• Repayment: Depends on choice of lender

Qualifications

• Be 18 years of age or older
• Have a checking or savings account
• Have regular income
• Have a fair credit rating

Pros

• Spotlight Loans is willing to work with individuals who have less-than-perfect credit, making it a viable option for those who may struggle to secure loans from traditional lenders​​​​.
• Spotlight Loans offers same-day approval and funding, which is beneficial for those in urgent need of funds. This makes it a good option for emergency financial situations​​.
• Unlike traditional payday loans, Spotlight Loans provides the option to repay the loan over a period of months, offering more flexibility in repayment planning​​​​.

Cons

• One of the most significant drawbacks of taking a personal loan with Spotlight Loans is the potentially high interest rates. With APRs that can be much higher than traditional personal loan lenders, this can lead to substantial interest payments over time​​.
• Spotlight Loans offers loan amounts that are relatively low, which may not be sufficient for all borrowers’ needs​​​​.
• Spotlight Loans services are not available in all states, so it’s important to check if you reside in an eligible location before applying​​.

Spring Loans (Best for Bad and No Credit)

For students with limited credit history or past financial missteps, the journey to securing funds for living expenses can seem daunting. Spring Loans provides a beacon of hope in such situations. Their belief is that everyone deserves a fair shot at education, irrespective of their credit background. With a comprehensive approach to evaluating financial needs and situations, Spring Loans offers solutions that consider more than just a credit score. This way, students can focus on their studies while being assured of their day-to-day living requirements.

Check rate on website

on website

Spring Loans Personal Loans

4.2

Stilt’s lender ratings reflect the findings and opinions of our editorial staff. Our scoring methodologies consider a wide array of factors and data points for every lender, offering, and financial solution.

Min. credit score

None

Fixed APR

27.00%

Variable APR

N/A

View details

Overview

• Minimum credit score: None.
• Fixed APR: 27.00%
• Loan amounts: $3,000.
• Repayment: 48 months.

Qualifications

• Demonstrate a recurrent income.
• Minimum age prerequisite: 18 years.
• Validate U.S. citizenship status with an SSN.
• Provide a legitimate U.S. driver’s license or a state identity card.
• Establish a functional bank account for incoming deposits.
• Adhere to any specific demands by the loan provider.

Pros

• Open to applicants with any credit background.
• Four-year loan period aids in structured financial management.
• The $3,000 offer addresses several short-term financial challenges.
• Wide-reaching eligibility criteria invite a broad spectrum of applicants.
• The focus on dependable income over job title benefits varied income sources.

Cons

• The set 27% APR is higher than many alternatives.
• Restriction to a $3,000 loan might not cover all financial outlays.
• Possessing specific IDs is mandatory, sidelining some applicants.
• A prerequisite for an ongoing bank account may limit certain users.

First Premier Lending (Best for Bad Credit)

Living expenses during college can accumulate, and for those with a tarnished credit history, finding a financial solution can be challenging. First Premier Lending extends its support to such students, looking beyond traditional credit scores. The lender understands that financial mistakes can happen, and rather than penalizing students for past errors, they offer tailored loan solutions. Students can thus manage their living expenses and concentrate on their educational journey.

Check rate on website

on website

First Premier Lending Personal Loans

4.2

Stilt’s lender ratings reflect the findings and opinions of our editorial staff. Our scoring methodologies consider a wide array of factors and data points for every lender, offering, and financial solution.

Min. credit score

None

Fixed APR

27.00%

Variable APR

N/A

View details

Overview

• Minimum credit score: None.
• Fixed APR: 27.00%.
• Loan amounts: $3,000.
• Repayment: 48 months.

Qualifications

• Maintain a consistent source of income.
• Must be at least 18 years of age.
• Possess valid U.S. citizenship and a legitimate social security number.
• Hold a current U.S. driver’s license or state-issued ID.
• Keep an active bank account for direct deposit.
• Satisfy any lender-specific criteria, such as credit rating, borrowing history, or place of residence.

Pros

• No minimum credit score requirement allows accessibility for those with varied credit histories.
• 48-month term provides clarity and allows for long-term financial planning.
• Specific loan amount of $3,000 can meet many short-term financial needs.
• Broad set of qualifications make the loan accessible to a wide range of people.
• Emphasis on consistent income, not necessarily employment type, allows flexibility for borrowers.

Cons

• A fixed APR of 27% is relatively high.
• Loan amount is capped at $3,000, which might not cater to larger financial requirements.
• Requirement of a U.S. driver’s license or state-issued ID could exclude some individuals.
• Mandatory active bank account could be limiting for those who are unbanked.

College Ave (Best for Good Credit)

Aiming to support students who have demonstrated financial responsibility, College Ave offers student loans for those with good credit, especially tailored for living expenses. Recognizing that a comprehensive college experience extends beyond just tuition fees, College Ave provides competitive interest rates and flexible repayment options. Students can thus secure their living arrangements, be it accommodation, food, or other daily necessities, with ease and peace of mind.

Check rate on website

on website

College Ave Undergraduate Private Student Loans

4.8

Stilt’s lender ratings reflect the findings and opinions of our editorial staff. Our scoring methodologies consider a wide array of factors and data points for every lender, offering, and financial solution.

Min. credit score

600 or better

Fixed APR

4.07% - 15.48%

Variable APR

5.59% - 16.69%

View details

Overview

• Minimum credit score: 600 or better.
• Fixed APR: 4.07% – 15.48%.
• Loan amounts: $1,000 – $150,000.
• Repayment: 5, 8, 10, 15, and 20 years.

Qualifications

• U.S. citizen or permanent resident.
• For undergraduate loans: Part-time enrollment at an accredited college/university.
• International students: Need a Social Security number and a co-signer.
• For refinance loans: Must be 18 years or older.
• For refinance loans: Graduation from an eligible school is required.

Pros

• Prequalify with a soft credit check
• Flexible repayment options
• Offers co-signer release for private loans

Cons

• Charges late fees
• Must have graduated to be eligible to refinance
• Half of repayment term must have passed to release co-signer

Sallie Mae (Best for Very Good Credit)

Sallie Mae stands out as a premium choice for students with an excellent credit track record. They understand that to truly thrive in an academic setting, students need more than just tuition coverage; they need to cover their living expenses without constant financial worry. Offering some of the most competitive rates in the industry, Sallie Mae ensures that students with very good credit get the best possible terms. With transparent conditions and a legacy of trust, students can focus on their education, knowing their living costs are well-managed.

Check rate on website

on website

Sallie Mae Undergraduate Private Student Loans

4.5

Stilt’s lender ratings reflect the findings and opinions of our editorial staff. Our scoring methodologies consider a wide array of factors and data points for every lender, offering, and financial solution.

Min. credit score

Mid-600's

Fixed APR

4.50-15.49%

Variable APR

6.37-16.70%

View details

Overview

• Minimum credit score: Mid-600’s.
• Fixed APR: 4.50-15.49%
• Variable APR: 6.37-16.70%
• Loan amounts: Minimum of $1,000 per year.
• Repayment: 10 to 15 years.

Qualifications

• Typical credit score of approved borrowers or co-signers: Does not disclose.
• Minimum income: Did not disclose.
• Loan amounts: $1,000 up to 100% of the school-certified expenses.

Pros

• One of the few lenders to provide loans to part-time students.
• Non-U.S. citizens, including DACA students, can apply with a U.S. co-signer.

Cons

• You can’t see if you’ll qualify and what rate you’ll get without a hard credit check.

Upgrade (Ideal for Good to Excellent Credit)

While specific student loans for living expenses may be limited, Upgrade provides personal loans that can help cover various costs, including living expenses. With our efficient digital platform and quick loan approvals, students with good to excellent credit can rely on Upgrade to bridge the gap and support their living expenses while pursuing their educational goals.

Check rate on website

on website

Upgrade Personal Loan

5.0

Stilt’s lender ratings reflect the findings and opinions of our editorial staff. Our scoring methodologies consider a wide array of factors and data points for every lender, offering, and financial solution.

Min. credit score

560

Fixed APR

8.49% - 35.99%

Variable APR

N/A

View details

Overview

• Minimum credit score: 560
• Fixed APR: 8.49% – 35.99%
• Loan amounts: $1,000 to $50,000
• Repayment: 3 to 5 years (7 years on some larger loans)

Qualifications

• Possess an active bank account.
• Able to provide a legitimate email address.
• Minimum age requirement: 18 years (19 for Alabama residents).
• Credit score of 600 or higher.
• Annual income of $25,000 or more.

Pros

• Willing to accommodate borrowers with a credit score as low as 560.
• Offers flexibility with a range of loan amounts from $1,000 to $50,000. This can be suitable for both small and large financial needs.
• Provides options for repayment, allowing borrowers to choose a timeline that best suits their financial situation.
• Once approved, borrowers can access funds in just one day, which is useful for urgent financial needs.

Cons

• Origination fees can go as high as 9.99%, which might add a significant cost to the loan.
• Apart from the origination fee, there are fees for late payments and failed payments, which can add up if one is not careful.
• While there is an option to extend repayment for larger loans up to 7 years, it’s not standard for all loan amounts.

Conclusion

Student loans can be used to pay for living expenses and other things. While federal loans are always better, you should consider private loans too. After disbursement, make sure you use the private or federal student loan exclusively for educational purposes. Minimize your borrowing as much as possible and avoid excessive spending.

Frank Gogol

I’m a firm believer that information is the key to financial freedom. On the Stilt Blog, I write about the complex topics — like finance, immigration, and technology — to help immigrants make the most of their lives in the U.S. Our content and brand have been featured in Forbes, TechCrunch, VentureBeat, and more.

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