How to Build Credit With Student Loans

If you’re a student looking to build your credit, you’re in luck! Student loans can actually be a powerful tool for establishing and improving your credit history. In this article, we’ll dive into the ins and outs of how to leverage your student loans to build credit and help you achieve your financial goals.

How to Build Credit with Student Loans

When it comes to building credit with student loans, there are a few key strategies that can help you along the way. Let’s break them down:

1. Make All Your Payments on Time

One of the most important factors in building credit is to consistently make your payments on time. Late payments can have a negative impact on your credit score and can be detrimental to your credit history. Set up reminders or automatic payments to ensure you never miss a due date.

Additionally, if you have multiple student loans, it’s crucial to stay on top of each payment. Falling behind on even one loan can have a domino effect on your credit.

When you make your payments on time, it shows lenders that you are responsible and reliable. This can help improve your creditworthiness and increase your chances of being approved for future loans or credit cards.

2. Make Your Payments Affordable or Get Help

While making all your payments on time is essential, it’s also important to ensure that your payments are manageable within your budget. If you’re struggling to keep up with your student loan installments, explore options like income-driven repayment plans or loan forgiveness programs.

Income-driven repayment plans adjust your monthly rates based on your income and family size, making them more affordable. These plans can help prevent you from falling into financial hardship and defaulting on your loans.

On the other hand, loan forgiveness programs can help you eliminate a portion or all of your student loan debt. These programs are typically available to individuals who work in certain public service fields or who meet specific criteria.

Don’t hesitate to reach out to your loan servicer to discuss potential assistance. They may be able to offer you alternative repayment options that make your monthly payments more affordable.

3. Consider Student Loan Refinancing

If you’re in a position to do so, you might consider refinancing your student loans. Refinancing involves obtaining a new loan with better terms to replace your existing loans. This can potentially help you secure a lower interest rate or reduce your monthly payment amount.

However, it’s essential to carefully weigh the pros and cons before deciding to refinance. Consider factors such as the interest rate, repayment terms, and any potential fees associated with the refinancing process.

Refinancing can be a smart move if you can qualify for a lower interest rate, which can save you money over the life of your loan. It can also simplify your repayment by combining multiple loans into one, making it easier to manage your debt.

On the other hand, refinancing may not be the best option for everyone. If you have federal student loans, refinancing them with a private lender means losing out on certain benefits like income-driven repayment plans and loan forgiveness programs. Before making a decision, evaluate your financial situation and consider consulting with a financial advisor who can provide personalized guidance based on your situation.

Best Student Loan Refinancing Lenders to Build Credit With

Ready to dive into the world of student loan refinancing? Whether you’re looking to drop your interest rate, change up your repayment terms, or simply want to see what’s out there, refinancing can help. But which lenders should you consider? Below, you’ll find out top picks for student loan refinancing lenderes!

Upstart (Best for Good Credit)

Upstart’s approach to refinancing student loans is rooted in innovative technology. By leveraging artificial intelligence, Upstart goes beyond traditional credit assessments, offering refinancing options based on a more holistic understanding of an individual’s financial profile. This ensures a broader range of borrowers can access competitive refinancing terms that align with their unique situations.

Check rate on website

on website

Upstart Personal Loan

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

None

Fixed APR

4.60-35.99%

Variable APR

N/A

View details

Overview

• Minimum credit score: None.
• Fixed APR: 4.60-35.99%.
• Loan amounts: $1,000-$50,000.
• Repayment: 3 or 5 years.

Qualifications

• Hold U.S. citizenship or possess permanent residency.
• Be a minimum of 18 years old in the majority of states.
• Provide a valid email address and Social Security number.
• Be currently employed full-time or starting a full-time job within the next six months.
• Maintain an active bank account with a recognizable routing number.
• Not have declared bankruptcy in the past year.
• Ensure no delinquencies are present on their current credit reports.
• Record fewer than six hard credit inquiries in the past six months, excluding inquiries for student, auto, or mortgage loans.

Pros

• Welcomes first-time credit users.
• Provides quick fund disbursement.
• Allows flexibility in adjusting payment due dates.
• Offers pre-qualification through a soft credit inquiry.
• Customer support available seven days a week.

Cons

• Origination fee may apply.
• Does not offer joint, co-signed, or secured loan options.
• Lacks a mobile application for loan management.
• Limited to two loan repayment terms.

Spotlight Loans (Best for Bad Credit)

As a personal loan provider, Spotlight Loans offers tailored financial solutions designed to meet the diverse needs of borrowers, featuring competitive rates, straightforward application processes, and the flexibility to cover a wide array of personal expenses.

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​​.

AmOne (Best for Okay Credit)

AmOne provides an efficient platform for those seeking to refinance their student loans. Acting as a conduit between borrowers and a wide array of lenders, AmOne focuses on ensuring that individuals find optimal refinancing options tailored to their unique financial circumstances and goals.

Check rate on website

on website

AmOne Personal Loan

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.

Spring Loans (Best for Bad Credit and No Credit)

Spring Loans offers specialized solutions for student loan refinancing. Recognized for its adaptive lending options, borrowers can navigate their platform with ease to identify refinancing opportunities that align with their current and future financial scenarios.

Check rate on website

on website

Spring Loans Personal Loan

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.

Sallie Mae (Best for Very Good Credit)

A well-established name in the student loan sector, Sallie Mae offers competitive refinancing options for those looking to optimize their existing student loan terms. With a legacy of trust and comprehensive loan management tools, borrowers can confidently approach Sallie Mae for their refinancing needs.

Check rate on website

on website

Sallie Mae Undergraduate Student Loan

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.

College Ave (Best for Good Credit)

College Ave is a dedicated player in the student loan space, and their refinancing solutions are designed with the borrower’s best interests in mind. Offering flexible terms and rates, College Ave aims to simplify the refinancing process and provide individuals with options that best suit their repayment capabilities.

Check rate on website

on website

College Ave Private Undergraduate Student Loan

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

How Credit Impacts Your Financial Goals

Now that we’ve covered the strategies for building credit with student loans, let’s explore why credit is so important when it comes to achieving your financial goals.

Your Credit Score Determines How Eligible You Are for Loans

Your credit score plays a critical role in determining your eligibility for loans, credit cards, and even renting an apartment. Lenders and creditors use this score to assess your risk as a borrower, so it’s crucial to have a solid credit history.

A good credit score can open doors to favorable interest rates, better loan terms, and higher credit limits. It gives you the financial flexibility and leverage you need to make significant purchases or investments in the future.

For example, let’s say you’re planning to buy a car. With a good credit score, you’ll have access to auto loans with lower interest rates, which can save you thousands of dollars over the life of the loan. Additionally, having a strong credit history may also help you negotiate a better price on the car itself, as sellers often view buyers with good credit as more reliable and trustworthy.

A Good Credit Score Helps You When You Decide to Become a Homeowner

Similarly, if your goal is to own a home, a healthy credit score is essential. Mortgage lenders use your credit score to determine the interest rate they’ll offer you. A higher credit score can result in a lower interest rate, which can save you tens of thousands of dollars over the life of your mortgage. 

It can also increase your chances of getting approved for a mortgage in the first place, as lenders are more likely to lend to borrowers with a proven track record of responsible credit management.

Healthy Scores Are Beneficial for Aspiring Entrepreneurs

Furthermore, if you’re an aspiring entrepreneur looking to start a business, having a solid credit history can make a significant difference. Many small business owners rely on loans or lines of credit to fund their ventures. 

With a good credit score, you’ll have access to better loan terms, such as lower interest rates and higher credit limits, which can provide the financial support you need to get your business off the ground.

Final Thoughts

As you can see, whether you’re planning to buy a car, own a home, or start a business, having a healthy credit score will give you a competitive advantage and put you on a path towards financial success.

Building credit with student loans is not only about responsibly managing your debt but also about laying a solid foundation for your financial future. By following the strategies outlined in this article and staying on top of your payments, you’ll be on your way to establishing a strong credit history that will serve you well for years to come.

Remember that credit is a long-term game. It takes time and consistent effort to build and maintain a good credit score. But the rewards are worth it. With a strong credit history, you’ll have greater financial opportunities and the ability to achieve your goals with confidence.

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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