Can I use a personal loan to consolidate student loans?

Personal loans can legally be used to pay off student-loan balances, but federal student-loan borrowers almost always lose more than they gain. Federal Direct Loans include income-driven repayment plans (PAYE, SAVE, IBR), Public Service Loan Forgiveness eligibility, deferment and forbearance during hardship, and fixed rates set by Congress (currently 5.5-8.05% depending on loan type and year). Refinancing into a personal loan permanently forfeits all of those protections.

The math can favor a personal loan only for private student loans with very high fixed rates (15%+), if you have excellent credit and can qualify for a personal loan at a materially lower APR, and if you do not expect to need income-driven repayment or forgiveness. Even then, dedicated student-loan refinancing lenders (SoFi, Earnest, Laurel Road, ELFI) offer lower rates than the personal-loan market for student-debt refinancing and are purpose-built for this use case.

Borrowers who use a personal loan to pay federal student debt should be aware they can never un-do the move: once federal loans are paid off, the federal benefits and forgiveness programs disappear permanently.