Can You Use Your Student Loan to Pay Off Credit Cards?

Can You Use Your Student Loan to Pay Off Credit Cards?

August 3, 2021 0 By Patrick Fletcher

Most students nowadays are forced to take out student loans so that they can pay off all tuition costs. Tuition is really high, so many people are not in a financial situation that allows them to pay everything they need. This is completely normal and a well-used student loan can be the best thing you have done for yourself and your future.

However, as this is a large sum of money, you may wonder if you can use it for purposes that are not directly related to schooling, such as credit card debt repayment. This is a great question, so we decided to discuss in detail in this article whether it is a good idea to use student loans to pay off credit cards.

Is it generally a good idea to use a student loan for non-schooling purposes?

If we need to answer this question briefly and clearly, we can say: no, don’t do that. However, the explanation is a bit more extensive and includes a number of reasons why you should avoid using student loans for anything that is not directly related to schooling.

First of all, the contract that you will have to sign before getting a student loan determines exactly for what purposes this money can be used. Second, if you are prone to spending large sums of money (which is often the case with people who have large credit card debts) it is unlikely that you will stop at using a student loan to pay off credit cards.

Instead, you may be tempted to take a second or third loan, which in the long run can be very problematic for your future financial situation. The best choice is to use this money exclusively for what it was originally intended for: for the costs of your tuition and ensuring uninterrupted, smooth schooling.

Check the terms of the contract


Depending on whether you are taking out a federal or private student loan, the terms of the contract you are signing may differ to a lesser extent. However, the general rule is that student loans can only be used to pay for tuition, accommodation, books, computers and other supplies used for schooling, transportation to school and home, and other similar purposes.

In case you pay any of the mentioned expenses with a credit card, you can refund that money from the student loan, but we certainly do not advise you to use that loan for some other, general payments that have nothing to do with your education.

Think about the future

We agree that taking out a student loan for the purpose of paying off credit card debt may sound like a good idea. This allows you to defer payment of the debt from the card until the period after graduation. Also, the low interest rates that are characteristic of student loans can attract you. However, as much as this sounds like it makes sense it can put yours in a very unenviable position over time.

Think about your future and the financial situation you will find yourself in when you finish school. Who can guarantee that you will not make another debt on your credit card and find yourself in a situation where you end up paying off two debts. Imagine how it would feel to push yourself into a corner this way. S

o we always advise you to restrain yourself and find a way to pay off your credit card that will create much safer conditions for your future. Of course, this does not mean that you should take loans from anyone just to get yourself out of an unpleasant situation. Keep in mind that nowadays there are a large number of fraudulent companies that you should beware of. Collecting more info about this can prevent you from being deceived and left without money.

What to do instead?


You may be wondering: how can I as a student repay my credit card debts if I don’t take a student loan? This is a great question and we offer you a few answers to it.

Avoid using your credit card for new payments

Students often think that it is okay to use their credit cards, even though they have a huge debt to her that they cannot repay. You might think: I already have a big debt a few extra expenses won’t make a big difference. But this cannot be further from the truth. Avoiding using a credit card for new payments can make the difference between a debt that is within reasonable limits and a debt that is so large that you can’t think of a way to pay it off. That is why we advise you to completely avoid using a credit card until you are debt-free.

Make more money


Considering that you are a college student, there are many ways to make money during your schooling and pay off all your credit card debts in the blink of an eye. Consider taking part-time jobs to do when you’re not in class. You can choose freelance jobs or teach other students certain subjects in which you are knowledgeable about. Take time to think about what you could do to make more money and get rid of debt and then go for it.

Find a pay-off approach that works for you

In case you have debts on several credit cards, it is necessary to find the pay off approach that suits you best. It is a good idea to start with the credit cards that have the highest interest rates, because this will allow you to save more money over time. Find a system that works for you that will get you out of debt in the most efficient way.


Students who have large debts on credit cards are often tempted to take a student loan to pay them off. While this may seem like a good idea, the fact is that in the long run it can do much more harm than good. It is likely that your loan agreement does not allow for such costs, and it is also possible that this will lead you to even larger debts that you will not be able to pay off in the end.

Instead of using a student loan to pay off credit card debts, we suggest that you stop using a credit card and find a way to make more money, because this is always the safest approach that leads you to solving the problem.