Getting a Student Loan Even if you Have Bad Credit

Those who are adversely affected by their poor credit histories should not be have to suffer with not being able to get students loans and subsequently not get their chance at a college education. Thankfully there are private student loan providers which offer specialized loans to those who have bad credit histories so that they can continue with the college education. The trick is actually in finding these lenders and getting an acceptable loan arrangement with them.

The first place to look is at federal student loans. The beauty of federal loans is that the government doesn’t look at your credit history when they are considering your application. Therefore even if you have the worst credit score imaginable there is still a chance that you would be granted the student loan. The only problem with federal loans is that there is a set quota on how many loans that can be given per year. The eligibility of the loan is determined by the “neediness” of the applicant and as such as much as 50% of all applications are turned down.

The first federal loan product to look at is the Stafford loans which are available for both undergraduates and graduates. These loans work under the assumption that you don’t have a credit history so the loans are “bad credit proof” as they don’t use credit histories as a determinant in their loan process. Stafford loans have annual interest rates of about 2.5% which makes it the most favorable loan if you are able to get it.

After exhausting the Stafford loan option, borrowers can look for other similar student loans such as Perkins loans, and even PLUS loans. PLUS loans are slightly different in that their loans are offered to parents instead of the student. Therefore if a student has a bad credit history, there is no impact as the loan is made out to their parents and the parents are expected to cover the loan. An added benefit to the PLUS loan arrangement is that instead of covering only for college tuition fees, other items like book, computers, and boarding costs can also be taken up by the loan.

If you have tried and been rejected by all the government student loans listed above you should then consider the use of private student loans. Private student loans are normally much easier to obtain even if you have a bad credit history however cost more because they aren’t subsidized by the government. The normal rate for private students loans range from 7% - 9% depending on the provider. We have listed some of our favorite student loan lenders above which have bargain basement rates suitable for those students with bad credit histories.

You must have the mindset that even with a bad credit history; you still deserve to go to college. Nothing should stand in the way of you getting the higher education and funding issue should definitely not be one of them.