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If you have a bad credit rating, or no credit rating at all, you may be wondering if you can get the bad credit student loan you need to obtain a higher education. Your first option should be to scour the market for grants and scholarships. Another option would be to find a cosigner who has a steady income and a credit rating better than yours. Cosigners could be your parents, close relative, or other individuals who are interested in your future.
Prohibitively Expensive
In spite of the high cost, many are willing to stake their financial future to obtain a college education. Of course, a higher education will help you land a better job in a career field of your choice. A loan may be the single way to get you through four years of study. You may even be able to land a student loan without a cosigner.
If You Need a Cosigner
If your credit is bad enough that you are having trouble finding a student loan, you may have to seek out a cosigner. This cosigner must understand that should you default for any reason, the loans become their responsibility. Bad Credit student loans do carry higher than average interest rates, but having a cosigner will bring those interest rates down. Special efforts should be made to repay these loans to avoid bad blood between you and family members or friends who have believed in you. Also, if payments are made in a timely manner for a number of months, you may be able to eventually to get the cosigner off the loan and out of legal obligation.
Government Loans
In spite of poor or no credit scores, government loans exist that pay no attention to credit histories. These come under the name of Stafford or Perkins loans. You will find that these loans offer many helpful benefits: Relaxed qualification benchmarks. Repayment plans that are flexible. Low interest rates. Even some students who are rated as very poor risks can land one of these loans. They are given with qualifications regarding the school where studying will take place, the number of credit hours taken, etc. Credit scores are not even considered.
Federal Loan Applications
Do not think that applying for one of these loans is a big complicated deal. The process is really rather easy. You will need to complete the Free Application for Federal Student Aid (FAFSA). The FAFSA is the application most colleges use to determine eligibility for federal, state, and college-sponsored financial aid, including grants, educational loans, and work-study programs. You can get one online or from the student financial aid office at your college or university. There are deadlines, so plan ahead.
Private Lenders
Sometimes banks or credit unions are willing to give bad credit student loans. Another source for private lenders is the internet. Loan interest rates and repayment terms will not be as comfortable as government loans, but still, they are there. Because of the large number of lenders, you should shop around and get the best interest rate and repayment terms.
Do Not Stop Thinking About Tomorrow
You should not let bad credit (or no credit) get in the way of your pursuit of a higher education. Getting a student loan, government or otherwise, will also give you a chance to improve your credit rating for the future if you make timely payments as outlined in your contract.
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