Can you get student loans with bad credit? The short answer is yes. The long answer is, that depends on the type of student loan.
You won’t find bad credit student loans designed specifically for students with poor credit. But you can qualify for federal student loans, which don’t take your credit score or credit history into account at all.
Private student loans might be available to you as well, but you’ll probably need to apply with a creditworthy cosigner to qualify. Let’s take a closer look at your options for student loans even with a subpar (or nonexistent) credit history.
You can take out federal student loans (even with bad credit)
Federal student loans were designed to help all students get the aid they need to pay for a college education. These loans don’t take your past financial activity into account, so you can qualify for federal student loans even with bad credit.
In fact, you don’t need to go through a credit check at all to take out federal student loans. You do, however, need to fill out the Free Application for Federal Student Aid, or FAFSA. This form collects information about your and your family’s financial situation to determine your eligibility for financial aid.
Some colleges also require you to submit a form called the CSS Profile to be eligible for institutional aid. Based on the information you provide, your college’s financial aid office will offer you need-based or non-need-based federal student loans.
If you have financial need, you might also qualify for grants, like the Pell Grant, or work-study funding. Note that you’re not obligated to take out the full amount of aid that you’re offered.
Before accepting a loan, review the terms and conditions, and use a student loan calculator to estimate your future monthly payments. By taking the time to understand your loans, you can make sure you don’t take on too much debt.
Once you start paying off your federal student loans, your on-time payments will help build your credit score.
Explore private student loans for more funding
Federal student loans should almost always be your first choice when borrowing for school. With a federal student loan, you’ll get a relatively low interest rate, as well as a variety of flexible repayment plans and protections.
But federal student loans don’t always cover the full cost of school, and you might need additional funding. If that’s the case, it’s worth exploring your options for private student loans.
Unlike the Department of Education, private lenders do take your credit score into account before approving you for a private student loan. So you won’t find bad credit student loans from a private company.
But if you have poor credit, all hope is not lost. To get around this requirement, you can apply with a creditworthy cosigner, like a parent or other relative.
Your cosigner’s strong credit will make up your weak credit, thereby making you eligible for a loan. That said, your cosigner will be just as responsible for the debt as you are.
If you fail to repay the loan, your cosigner will be on the hook for your debt. So before entering a loan agreement with your parent or another person, make sure to discuss expectations around repaying the loan.
By having a straightforward discussion about who will pay back the money and when, you can prevent any conflicts before they occur.
Note that private student loans have different terms and conditions than federal student loans. You probably won’t have as many repayment plans, like income-driven repayment. And the interest rate you get will depend on your cosigner’s creditworthiness, along with other factors.
Plus, you can choose between a fixed interest rate, which stays the same over the life of the loan, and a variable rate, which can fluctuate along with prevailing market rates.
Because private lenders offer different terms, make sure to shop around for the best rates before choosing a loan. By doing your research, you can find the private student loan with the best terms and conditions for your situation.
Be careful about taking on too much debt
When it comes to borrowing for college, you won’t find bad credit student loans. But you can take out federal student loans, which don’t require a credit check at all. And if you need even more money, you might qualify for private student loans, as long as you can apply with a cosigner.
That being said, you should be cautious before taking on too much debt. Besides student loans, explore your options for grants and scholarships. Consider a part-time job to earn extra money, and learn to cut your expenses and live well on less by being frugal.
It’s well worth exploring ideas and creative solutions and making the effort to take out as few loans as possible. Once you do enter repayment on your loans, make sure to keep up with your monthly bills.
By making on-time payments, you can build up your credit score into the good or even excellent range. Then, if you need another loan or mortgage in the future, you’ll be able to qualify for the best rates on your own.
Kali Hawlk contributed to this article.
Need a student loan?Here are our top student loan lenders of 2018!
|1 Important Disclosures for CollegeAve.
College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or Nationwide Bank, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
Information advertised valid as of 11/1/2018. Variable interest rates may increase after consummation.
2 Important Disclosures for Discover.
3 Important Disclosures for Ascent.
Before taking out private student loans, you should explore and compare all financial aid alternatives, including grants, scholarships, and federal student loans and consider your future monthly payments and income. Applying with a cosigner may improve your chance of getting approved and could help you qualify for a lower interest rate. Ascent Student Loans may be funded by Richland State Bank (RSB). Ascent Student Loan products are subject to credit qualification, completion of a loan application, verification of application information and certification of loan amount by a participating school. Loan products may not be available in certain jurisdictions, and certain restrictions, limitations; and terms and conditions may apply. Ascent is a federally registered trademark of Turnstile Capital Management (TCM) and may be used by RSB under limited license. Richland State Bank is a federally registered service mark of Richland State Bank.
* Application times vary depending on the applicants ability to supply the necessary information for submission.
* The Sallie Mae partner referenced is not the creditor for these loans and is compensated by Sallie Mae for the referral of Smart Option Student Loan customers.
4 = Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.
5 Important Disclosures for PNC.
PNC Bank is one of the nation’s largest education loan providers. For over 40 years, PNC has been committed to helping students and their families make possible the adventure of college.
6 Important Disclosures for SunTrust.
Before applying for a private student loan, SunTrust recommends comparing all financial aid alternatives including grants, scholarships, and both federal and private student loans. To view and compare the available features of SunTrust private student loans, visit https://www.suntrust.com/loans/student-loans/private.
Certain restrictions and limitations may apply. SunTrust Bank reserves the right to change or discontinue this loan program without notice. Availability of all loan programs is subject to approval under the SunTrust credit policy and other criteria and may not be available in certain jurisdictions.
SunTrust Bank, Member FDIC. ©2018 SunTrust Banks, Inc. SUNTRUST, the SunTrust logo and Custom Choice Loan are trademarks of SunTrust Banks, Inc. All rights reserved.
7 Important Disclosures for LendKey.
Additional terms and conditions apply. For more details see LendKey
8 Important Disclosures for CommonBond.
A government loan is made according to rules set by the U.S. Department of Education. Government loans have fixed interest rates, meaning that the interest rate on a government loan will never go up or down.
Government loans also permit borrowers in financial trouble to use certain options, such as income-based repayment, which may help some borrowers. Depending on the type of loan that you have, the government may discharge your loan if you die or become permanently disabled.
Depending on what type of government loan that you have, you may be eligible for loan forgiveness in exchange for performing certain types of public service. If you are an active-duty service member and you obtained your government loan before you were called to active duty, you are entitled to interest rate and repayment benefits for your loan.
A private student loan is not a government loan and is not regulated by the Department of Education. A private student loan is instead regulated like other consumer loans under both state and federal law and by the terms of the promissory note with your lender.
If your private student loan has a fixed interest rate, then that rate will never go up or down. If your private student loan has a variable interest rate, then that rate will vary depending on an index rate disclosed in your application. If the interest rate on the new private student loan is less than the interest rate on your government loans, your payments will be less if you refinance.
If you don’t pay a private student loan as agreed, the lender can refer your loan to a collection agency or sue you for the unpaid amount.
Remember also that like government loans, most private loans cannot be discharged if you file bankruptcy unless you can demonstrate that repayment of the loan would cause you an undue hardship. In most bankruptcy courts, proving undue hardship is very difficult for most borrowers.
9 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|3.94% – 12.78%1||Undergraduate, Graduate, and Parents|
|4.06% – 13.06%3||Undergraduate and Graduate|
|4.34% – 12.99%2||Undergraduate and Graduate|
|4.25% – 11.10%*,4||Undergraduate and Graduate|
|5.03% – 11.23%5||Undergraduate and Graduate|
|4.12% – 13.13%6||Undergraduate and Graduate|
|5.62% – 10.01%7||Undergraduate and Graduate|
|3.93% – 9.81%8||Undergraduate, Graduate, and Parents|
|4.26% – 12.13%9||Undergraduate, Graduate, and Parents|