Can You Get Student Loans With Bad Credit?

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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. 

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1 Important Disclosures for College Ave.

CollegeAve Disclosures

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.

(1)All rates shown include the auto-pay discount.  The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.

(2)This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 8.35% fixed Annual Percentage Rate (“APR”): 120 monthly payments of $179.18 while in the repayment period, for a total amount of payments of $21,501.54. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.

(3)As certified by your school and less any other financial aid you might receive. Minimum $1,000.

Information advertised valid as of 11/4/2019. Variable interest rates may increase after consummation.


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3 Important Disclosures for Discover.

Discover Disclosures

  1. Students who get at least a 3.0 GPA (or equivalent) qualify for a one-time cash reward on each new Discover undergraduate and graduate student loan. Reward redemption period is limited. Please visit DiscoverStudentLoans.com/Reward for any applicable reward terms and conditions.
  2. View Auto Reward Debit Reward Terms and Conditions at DiscoverStudentLoans.com/AutoDebitReward.
  3. Aggregate loan limits apply.
  4. Lowest rates shown are for the undergraduate loan and include an interest-only repayment discount and a 0.25% interest rate reduction while enrolled in automatic payments. The interest rate ranges represent the lowest interest rate offered on the Discover Undergraduate Loan and highest interest rates offered on Discover student loans, including Undergraduate, Graduate, Health Professions, Law and MBA Loans. The fixed interest rate is set at the time of application and does not change during the life of the loan. The variable interest rate is calculated based on the 3-Month LIBOR index plus the applicable Margin percentage. The margin is based on your credit evaluation at the time of application and does not change. For variable interest rate loans, the 3-Month LIBOR is 2.250% as of October 1, 2019. Discover Student Loans will adjust the rate quarterly on each January 1, April 1, July 1 and October 1 (the “interest rate change date”), based on the 3-Month LIBOR Index, published in the Money Rates section of the Wall Street Journal 15 days prior to the interest rate change date, rounded up to the nearest one-eighth of one percent (0.125% or 0.00125). This may cause the monthly payments to increase, the number of payments to increase or both. Please visit discover.com/student-loans/interest-rates for more information about interest rates.
Discover's lowest rates shown are for the undergraduate loan and include an interest-only repayment discount and a 0.25% interest rate reduction while enrolled in automatic payments.

4 Important Disclosures for CommonBond.

CommonBond Disclosures

Offered terms are subject to change and state law restrictions. Loans are offered through CommonBond Lending, LLC (NMLS #1175900).

  1.  Rates are as of July 1, 2019 and include auto-pay discount. All loans are eligible for a 0.25% reduction in interest rate by agreeing to automatic payment withdrawals once in repayment. Variable rates may increase after consummation.

5 Important Disclosures for Citizens.

Citizens Disclosures

Undergraduate Rate Disclosure: Variable rate, based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of December 1, 2019, the one-month LIBOR rate is 1.70%. Variable interest rates range from 2.80% – 11.06% (2.80% – 10.91% APR) and will fluctuate over the term of the loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a co-signer. Fixed interest rates range from 4.72% – 12.19% (4.72% – 12.04% APR) based on applicable terms, level of degree earned and presence of a co-signer. Lowest rates shown requires application with a co-signer, are for eligible applicants, require a 5-year repayment term, borrower making scheduled payments while in school and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change. Please note: Due to federal regulations, Citizens Bank is required to provide every potential borrower with disclosure information before they apply for a private student loan. The borrower will be presented with an Application Disclosure and an Approval Disclosure within the application process before they accept the terms and conditions of the loan.

Please Note: International Students are not eligible for the multi-year approval feature.

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3.52% – 9.50%4Undergraduate and Graduate

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Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print to help you understand what you are buying. Be sure to consult with a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time.

Published in Credit & Debt, Paying for College, Student Loan Repayment, Student Loans