Can I get a student loan with bad credit history?

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Potential borrowers with bad credit – or no credit at all – may not be eligible for private student loans, but they will be eligible for federal loans.

Most federal student loans do not require a credit check, so this is the best way to fund your education if you have bad credit.

In fact, regardless of your credit score, when you are going to pay for college, you should start by using all government loans available to you before purchasing private loans. Federal student loans usually have lower interest rates than private loans (and they are fixed), plus they offer more protection for borrowers such as abstinence, deferral, income-adjusted repayment plans, and forgiveness programs.

Next, we’ll break down a few things to consider when you start looking for college financial aid, and how your credit score can play a role.

1. Start by looking for free help

Before you start applying for a student loan, first explore ways to get free money to cover your education costs, such as scholarships, grants, and work-study programs. The more you can take advantage of these programs, the less loans you will need to take.

The role of credit rating: Applying for free funding, such as a college scholarship, usually does not require your credit score information.

2. Then apply for a federal student loan.

You will then want to apply for a federal student loan by completing the online FAFSA form.® (Free Application for Federal Student Aid) You Can Find here… Both current and prospective undergraduate and graduate students can see their eligibility for financial aid by entering their personal details and completing the FAFSA form each academic year when they need help.

The role of credit rating: Although the FAFSA asks for financial details such as your income and savings, it will not ask for your credit score or ask for your credit report when you apply. Completing the FAFSA does not affect your credit score. For more information on what information you will need when applying for a federal loan, download this free worksheet Courtesy of the United States Department of Education.

The exception is federal loans that parents or guardians can take to help their children pay for college tuition, also known as Parent Loans PLUS… This requires a credit check and the website clearly states, “If you have frozen the security of your credit file, you must unlock or remove the lock at each credit bureau before proceeding. Your application will not be processed if you are a security freeze. ”Applying for a Parent PLUS loan will lead to serious scrutiny of your credit report, which may temporarily lower your credit rating by several points.

3. Finally, apply for private student loans.

Federal student loans have different loan limits depending on a number of factors, such as the type of student loan, which year of study the loan is for, and whether the student is considered a dependent. Once you (and your parent / guardian) have reached your borrowing limit, you may need to consider private student loans to make up for the difference.

The role of credit rating: There are numerous banks, credit unions and online lenders that offer private student loans. Most will require you (or your collaborator) to have a good credit rating (670 or higher) in order to qualify.

Those with low creditworthiness should check Serious for private student loans or refinancing. Earnest has honored some of the candidates. The minimum credit rating is 650 and there is no minimum income requirement.

When looking for a private student loan, you may come across several lenders who have no loan or co-signing requirements at all. Be aware that they will still count your income and are likely to charge higher interest rates than private lenders who check your creditworthiness.

Refinancing a student loan

  • Costs

    No refinancing fees

  • Eligible loans

    Federal, private loans, loans for graduates and students

  • Loan types

  • Variable rates (APR)

    From 1.99% (prices include a discount for auto payment 0.25%)

  • Fixed rates (APR)

    Starting from 2.98% (rates include 0.25%)% discount for auto payment)

  • Loan terms

    Flexible terms from 5 to 20 years

  • Loan amounts

    Minimum $ 5,000 to $ 500,000 (California residents must request refinancing of $ 10,000 or more)

  • Minimum credit rating

  • Minimum income

  • Allow co-signing

Editorial note: The opinions, analyzes, reviews or recommendations expressed in this article are solely owned by the Select editors and have not been reviewed, endorsed or otherwise endorsed by any third party.

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