One can argue that student loans are the worst, and they could be right. Unlike home loans or auto loans which are usually availed by well-settled and financially strong individuals, student loans are to be repaid by young professionals who have just started their carrier. Needless to say, they are often live on a shoe-string budget and have to put a cap on all kinds of expenses to pay off the student loan debt. So, the question is- can a personal loan be used for paying it off?
It makes sense, right? Since a personal loan can be used for any “personal” reason, why not repaying student loan debt? In most cases, you are right in believing the same. However, it’s important look at the idea from all perspectives.
The Bird’s-Eye View
The most important reason why you would want to take a personal loan to pay off student loan debt is to enjoy a better interest rate. If that’s not the case, you don’t have much to earn from the deal.
You want to reduce your EMIs and hence the financial pressure. Replacing a high-interest loan with a low-interest one is one way to go. However, if you are not able to get a personal loan with a lower interest rate then there is no point in applying for it even. You also need to see if the interest rate difference is enough, to say the least.