The GoodCall.com Team
Getting into school is hard enough, but figuring out how to pay for college is no less tricky. The average cost of attendance (which includes tuition, fees, room, and board) in public four-year in-state institutions was $21,950 in 2019-2020 according to Statista. When looking for student loans that often require good credit, what’s a student with […]
BY The GoodCall.com Team
Getting into school is hard enough, but figuring out how to pay for college is no less tricky. The average cost of attendance (which includes tuition, fees, room, and board) in public four-year in-state institutions was $21,950 in 2019-2020 according to Statista. When looking for student loans that often require good credit, what’s a student with bad credit to do?
Loans aren’t only reserved for students with good credit. There are student loans for bad credit or no credit at all, so let’s explore what’s available.
A credit score enables lenders to make a more informed decision on whether or not a person will repay a loan or end up defaulting. Like many other loan types, student loans are often given based on this credit rating, despite many students having no experience with credit at all. It may seem as though lacking a credit history or a credit score could be considered a good thing, but to most lenders, a blank slate is as big of a risk as a bad credit score. Private student loans in particular often won’t be available to those with low scores or no credit.
What is a good credit score? Anything above 700 results in better interest rates for the borrower. When it comes to school loans for bad credit, any score from 300 and up can still qualify for a student loan.
Unlike private loans, federal student loans are much more lenient about credit history, so they should be the first stop for any borrower no matter their credit history. These loans are built to help students pay for college. Federal student loans don’t always cover the full cost of college attendance, so when that happens, you can turn to private student loans for bad credit. Just compare the fees and annual percentage rate (APR) on a loan to make sure it’s the best fit for you.
Here are five of the best student loans for bad credit:
*As of 1/26/2020
Opting to apply for federal loans first is smart, but it may not cover all your costs which is where private loans come in. Here are some private loan options that allow cosigners.
Gain the best interest rate by using a cosigner with a great credit score. However, students who don’t have a cosigner or a credit history and need a loan should take a closer look. You’ll be able to fill out the online application in a snap without hurting your credit score and receive a preliminary decision. Several in-school repayment options make it easier to tailor your payments to your financial situation.
Discover is more than credit cards; they also offer student loans. Students of all kinds, from undergraduates to graduate to MBA, law, and international students can apply for a Discover student loan at up to 100% of school attendance costs. Applying online is fast and takes under 15 minutes (as long as you’ve gathered your paperwork ahead of time). Discover student loans don’t publish minimum credit scores, but they do suggest a cosigner for the best rates. Still, with decent repayment options, a slew of repayment assistance programs, and no application fees, it’s a viable option to fill in any tuition gaps.
MPOWER Private Student Loans provide loan options for international students, Deferred Action for Childhood Arrivals (DACA) recipients, refugees, and U.S. citizens without a co-signer or U.S. credit history. They focus on income potential instead of credit scores, which makes it easier to qualify. MPOWER has higher fixed interest rates and additional fees than other loans so be sure to check other options first if they are available to you.
These loans should be at the top of every student’s list as providers of student loans for bad credit or no credit at all. Flexible repayments and good rates are a boon. It begins with the Free Application for Federal Student Aid (FAFSA), which can be tedious, but knowing school information and your financial situation ahead of time helps speed along the process. Still, these loans have maximum borrowing limits, and it’s easy for most students to receive their max allotment and still need to borrow more from a secondary source to cover costs in full.
This loan reflects on the parent(s) credit score. If a student borrower has bad credit or no credit, the Parent Plus loan allows parents to step in, take responsibility for the loan, and gain the money needed to pay for their child’s schooling. These loans have higher fees and fixed interest rates than the federal direct and unsubsidized loans, but make a good option for parents lacking a strong credit history. Parents must start paying off the loan as soon as the money is disbursed, though they may request a payment delay while their child is in college.
The largest private student loan lender in the US offers loans at discounted interest rates with in-school payments and auto-debit. When it comes to private student loans for bad credit, a cosigner can make the difference. Almost 89% of new undergraduate Sallie Mae borrowers have a cosigner and are 4x more likely to be approved. It’s a fast loan process and the beauty of this loan lies in the repayment assortment. Unlike many loan companies, Sallie Mae even provides loans to part-time undergraduate students.
A credit score is a borrower’s key to snagging financial help to pay for college but it isn’t an absolute requirement. Securing money to pay for college is possible, with plenty of available school loans for bad credit. Fill out the FAFSA, view your proposed financial aid, and keep these options in mind.