You Can Obtain Student Loans Regardless of Credit

Even with a bad financial history or no prior borrowing, you can get student loans regardless of credit. Loans can be obtained several ways. Some federal loans require no credit check, and some have minimal credit requirements. You can get around bad credit by applying for a private loan with a cosigner. Or you can get a private loan despite having no credit or bad credit if you're willing to work or pay higher fees and interest rates.

Federal Stafford loans offer students a fixed interest rate and do not require a credit check. Almost any student can obtain this loan as long as they are studying at least half-time in an accredited university. It's always a good idea to apply for financial aid as well.

Other federal loans, such as federal PLUS loans for graduate students or their parents, do require a credit check or cosigner but the credit requirements are minimal compared to other types of loans offered by financial institutions. If you have bad credit, or if you don't have a cosigner, these may not be available to you and the rules are not flexible.

Private loans can be obtained for people who don't meet credit requirements on their own if they have a cosigner with good credit. If the student defaults on the loan, debt collectors will come to the cosigner, so the student needs a cosigner who trusts them completely. The advantage of having a cosigner with good credit is that the lender may offer a lower interest rate; if the cosigner has excellent credit a student with no credit may get a loan at Prime interest rates.

If a cosigner is unavailable, getting a loan is more difficult. A person with bad credit may have to search around a little more before being able to find a lender, but you shouldn't give up because you can find one. Since bankruptcy no longer absolves student loan debts, lenders know that student loans are a fairly safe investment.

If you are employed and working, and you can continue working while you study, this can help convince lenders to give you a loan despite bad credit. Generally they like it if you've been working for about two years. You also may need to work to save some money for the lending fees: if you have bad credit, in addition to higher interest rates, some financial institutions add fees when you take out a loan.

It is very possible to find student loans regardless of credit. With bad credit, it will take you more time and money to pay off these loans in the future, and above all when taking on this much debt, you should be sure you're going to finish school.

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