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Even if you have bad credit, you can still get student loans. Most federal loans don’t require a credit check, which means you can borrow funds for education regardless of your credit history. Additionally, private loans may be available to you if you are able to get a cosigner or work with a lender that considers your course of study to be potentially lucrative.
Coming up with the money to pay for higher education can be difficult, but loans—especially those based on financial need—are often helpful in providing support up front. Even if you have a low credit score or a less-than-perfect credit history, student loan options are still available to you.
Read on to learn more about how to find federal student loans or private loans with bad credit as well as tips for improving your credit if you need a higher score to secure a loan.
Getting a student loan with bad credit means taking one of two paths: applying for federal student loans or finding a cosigner for a private student loan.
Both of these options could work well for your situation, but it’s generally useful to apply for federal student loans first, as they tend to have more benefits and lower interest rates.
Federal student loans are an excellent option for many people, including those with bad credit, because they are based on financial need rather than credit scores.
Before applying for federal student loans, you’ll need to make sure you meet the eligibility criteria, which include the following:
These are just a few of the requirements that the government mandates for anyone looking to get federal student loans.
If you do meet the criteria, you’ll need to fill out the Free Application for Federal Student Aid (FAFSA) to determine what options are available to you.
You may be eligible for any of the following types of federal student loans:
Since the majority of federal student loans don’t require a credit check, they are an excellent option for those who have poor credit or no credit history.
Federal student loans also offer other protections, like forbearance (in case there are periods you can’t make payments) and income-based repayment plans (which may offer loan forgiveness after a certain number of qualifying payments). Additionally, federal student loans offer fixed interest rates, which means you’ll have predictable payments for the entire life of the loan.
Federal student loans generally cover somewhere between $5,500 and $12,500 per year, although that amount can vary depending on your tax filing status and year in school. If that amount is not sufficient to cover your education costs, you may need to look into private loans.
If you have bad credit, it will likely be difficult to apply for private student loans on your own. Even if you were to qualify for a loan with bad credit, it’s possible the interest rate would be so high that you’d be unable to make payments while you were studying.
Typically, a better option if you do need a private student loan is to use a cosigner. If your cosigner has a high credit score and steady income, they’ll be able to secure better terms for the loan. That said, ensure you have a solid relationship with your cosigner, as they’ll be equally responsible for your debt if you cannot make payments.
Regardless of what kind of student loan you end up getting, working to improve your credit score can set you up for success down the road as you continue your education.
Just as your education opens up opportunities for advancement in your career, improving your credit score can unlock better interest rates—which makes it easier to do things like get a new car or buy a house. As you work through your studies, try out some of the following tips to build your score.
Additionally, you’ll want to take a close look at your credit report as you’re working to improve your score. If you notice any inaccurate or misleading information, it could be bringing down your score unnecessarily. In that case, you may want to work with a credit repair professional to file a dispute with the credit bureaus and have the misleading information removed.
Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.
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