Not every graduate student heads back to school with a great credit score. But with the right bad credit student loans, you don’t have to let your poor credit or lack of credit stand in your way.
To get you closer to the degree, life, and career you’ve always wanted, we searched for grad school student loans available to borrowers with poor credit. Here we highlight your best options to affordably borrow and pay for grad school.
Where to find bad credit student loans for grad school
As you start looking for bad credit student loans, check out these options first:
- Federal student loans for graduate students: These carry no or low credit requirements, making them some of the most accessible ways to borrow for grad school.
- Private graduate school loans: You might be able to get grad school loans from private lenders. But you’ll have to offset your poor credit by applying with a qualified student loan cosigner.
Both federal and private student loans have their pros and cons, but there are times when each can make sense.
Here’s an overview of the features each option can offer graduate students.
|Graduate loan type||Direct Unsubsidized Loans for graduate students||Grad PLUS Loans||Private student loans|
|Credit requirements||None||No adverse credit history||Good credit score in the mid-600s or higher, or a cosigner with good credit|
|Interest rate||6.00%||7.00%||Varies by lender and borrower credit score|
|Loan fee||1.066%||4.264%||Varies by lender|
|Annual loan limit||$20,500||Up to cost of attendance, after other financial aid is applied||Up to cost of attendance, though some lenders set their own loan limits|
|Aggregate loan limit||$138,500 (graduate and undergraduate debt)||None||Varies by lender|
Remember that you’re not locked into any one kind of loan — especially with bad credit student loans. You can even borrow a blend of different grad school loans to maximize your benefits and savings.
Federal student loans for grad school
As a graduate student, you can file the Free Application for Federal Student Aid (FAFSA) to get access to graduate school student aid and loans. After the government processes your FAFSA, your college puts together a graduate school student aid award package that outlines your options to pay for your graduate degree.
This financial aid award package is a great place to start looking for bad credit student loans. In particular, check for two federal student loans currently available to graduate students: Direct Unsubsidized Loans and Grad PLUS Loans.
Graduate students don’t need to demonstrate financial need to access either Direct Unsubsidized Loans or Grad PLUS Loans. You will, however, need to be an eligible student enrolled at least half time in a qualifying graduate program to access federal loans.
Direct Unsubsidized Loans for graduate and professional students have no credit requirements
Direct Unsubsidized Loans for graduate and professional students carry no credit check or income requirements to qualify. A lack of credit requirements could make these your best option to get affordable loans for grad school when you have poor credit.
As the table above shows, you will face limits on the amount you can borrow with Direct Unsubsidized Loans. If your costs are higher than that, don’t panic. You can borrow up to your limit in Direct Unsubsidized Loans for grad students, and cover the remaining costs with Grad PLUS or private student loans.
If you’re in a professional medical program, you might have higher annual and aggregate limits on Direct Unsubsidized Loans. Check with your school’s financial aid office to see if you can borrow more.
Grad PLUS Loans require you to have no adverse credit history
Unlike Direct Unsubsidized Loans, Grad PLUS Loan applications include a credit check. To get Grad PLUS Loans, you must not have an adverse credit history. Here’s what that means:
- Must not currently have any credit accounts with balances over $2,085 that are more than 90 days delinquent, in collections, or charged off in the past two years.
- Must not have a bankruptcy discharge, repossession, default determination, foreclosure, charge off of federal student aid, wage garnishment, or tax lien within the past five years.
The non-adverse credit standard is easier to meet than the credit requirements most private lenders set. So even if you were rejected for private student loans, it can still be worth applying for Grad PLUS Loans.
If you do have an item that would make your credit history adverse, you still have two options:
- Add an endorser to your Grad PLUS Loan application. The endorser plays a similar role to a cosigner, agreeing to repay the loan if you do not.
- Document and submit proof of extenuating circumstances that led to your bad credit.
In these cases, you can try to get your Grad PLUS Loan approved despite your adverse credit. If approved, you will be required to take an online course on credit.
Private student loans require good credit or a cosigner
Unlike the nonexistent or low credit requirements on federal student loans, private lenders usually want to see a high credit score and solid financial background. But if that’s not you, don’t write off private grad school loans. You can still get private student loans for grad school with the help of a qualified cosigner.
In fact, this is a pretty common solution for graduate students, with 62 percent borrowing private student loans for an advanced degree with the help of a cosigner in the third quarter of 2017, according to a report from education research firm MeasureOne.
To get bad credit student loans from private lenders, you’ll need to apply with a qualified cosigner. The lender will consider each applicant’s information. Even if you have bad credit, it could be balanced out by your cosigner’s positive credit history and qualifications.
Lenders commonly look for the following in cosigners:
- Positive payment history: Your cosigner must have a clean credit report with no recent missed payments or delinquencies.
- A high credit score: A good credit score for private student loans is usually at least in the mid-600s. But the higher, the better. You’ll have the best chance of getting approved and snagging lower rates if your cosigner’s FICO score is over 700.
- Low debt-to-income ratio: Lenders prefer cosigners with a debt-to-income ratio of 30 percent or lower, which indicates that they can afford to take over repayment if necessary.
Before your student loan cosigner signs the dotted line, make sure they understand that they will be equally responsible for the loan’s repayment.
Whatever your credit score, it doesn’t have to keep you from being able to pay for your advanced degree. With these options to get bad credit student loans, you can get the financing you need to pay your way through grad school. That frees you up to focus on getting the most return on investment from grad school — and paying off your student debt as fast as possible.
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 M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
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) or Turnstile Capital Management, LLC (TCM), which are not affiliated entities. Certain restrictions and limitations may apply. 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. All loan products may not be available in certain jurisdictions. Other terms and conditions apply. Ascent is a federally registered trademark of 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
|3.69% – 10.94%1||Undergraduate, Graduate, and Parents||Visit CollegeAve|
|3.97% – 12.97%3||Undergraduate and Graduate||Visit Ascent|
|4.34% – 12.99%2||Undergraduate and Graduate||Visit Discover|
|4.12% – 10.98%*,4||Undergraduate and Graduate||Visit SallieMae|
|5.03% – 11.23%5||Undergraduate and Graduate||Visit PNC|
|4.00% – 13.00%6||Undergraduate and Graduate||Visit SunTrust|
|4.72% – 9.81%7||Undergraduate and Graduate||Visit LendKey|
|3.72% – 9.68%8||Undergraduate, Graduate, and Parents||Visit CommonBond|
|4.19% – 12.06%9||Undergraduate, Graduate, and Parents||Visit Citizens|