8 Smart Tips on Getting Student Loans with Bad Credit
Are you a student with bad credit but in need of a loan still to make it through to graduation? Getting an education is not easy and neither is it cheap.
Having bad credit scores is not a good thing to have. It could disqualify you from many loan lenders. Despite bad credit scores, you can still apply for student loans to help you get through college.
Below, we’ve got 8 tips on getting student loans with bad credit.
1. Get a Co-Signer with Good Credit
Looking for student loans with bad credit can be a challenge to find. Still, it’s possible with a co-signer with great scores. A co-signer with excellent credit scores can offset your bad credit.
You can get a parent, grandparent, or trusted friend as your co-signer. Private lenders may also run a credit check. This is where they consider your income, history of debt repayment, and income-to-debt ratio.
With a co-signer, lenders will open their doors to you. You’d be able to use private student loans even with bad credit. The key is to make sure your co-signer is trustworthy and creditworthy.
2. Apply for a Federal Student Loan First
Private student loans for bad credit are tricky agreements to get into. It’d better for you to check out all federal student loan offers you could find first. They come with a variety of repayment plans and protections too.
They also don’t have credit requirements so your bad credit is not a problem here. PLUS loans for graduate students and parents are an exception to this.
Submit the FAFSA or Free Application for Federal Student Aid to access these loans.
3. Student Loans with Bad Credit Can Still Improve Credit Score
You might find yourself in a great spot and don’t have to get a loan yet. This is the time to fix your credit score if you have a bad credit score. This will make you a better borrowing candidate when the time comes to get a student loan.
Request copies of your credit reports and start reviewing them. Make sure to double check and dispute any errors you find. In 2017, 74% of Equifax consumers complained of credit errors and incorrect information on a credit report.
It’s something to take note of and look into if you’re also using Equifax. You can also improve your credit score by reducing total debt. Making on-time payments will also boost a bad credit score.
4. Make Use of Special Loan Programs
Are you a nursing student who is only trying to get by? Are you under a health-science degree and a disadvantaged student? If you are, you might qualify for special financial aid from the Department of Health and Human Services Programs.
Many of these loans from the said federal department have long-term, low-interest loans. They even offer non-credit loans to students in social and financial disadvantages. This is available to needy students enrolled in part-time or full-time medicine programs.
For example, the Nurse Faculty Loan Program funds schools to help undergraduate nurses. When assisted students move up as nurse faculty members, they can start paying back. It offers partial loan forgiveness of up to 85% over 4 years to graduates.
5. Loan-Shop and Compare Loan Features
Go shopping for a private loan to see what will work best with you. When you do, don’t forget to take notes of the details like post-payment plans or late fees. This will help you avoid any further bad credit on student loans.
It’s not enough to compare offers with the lowest interest rates. You need to be able to qualify for them and how long. It’s smart to find out if there are fees for prepayment or origination.
It’s also important to know more than one way to reach the lender. This way, when you come across billing or customer service issues, you know how to contact the lender.
To help you choose, come up with a list of pros and cons for each private loan you encounter while lean shopping.
6. Grad Students May Apply for PLUS Loans
PLUS loans check your credit history but they are not as strict. This credit check could even be laxer than private lenders. All you need to show is that you don’t have an adverse credit history.
The Office of Federal Student Aid doesn’t look for an amazing credit score but a clean one. You shouldn’t have or have had any major financial issues. If you have a history of default or bankruptcy, you can qualify with a creditworthy endorser.
7. Federal Direct Loans Are Very Beneficial
If you’ve exhausted all scholarship and/or grant opportunities, your next best bet is a loan. A federal direct loan, to be specific, is your best choice. We’ve written down the reasons why it’s the best one below.
If you want to know how to get bad credit student loans, credit scores are not factors of direct loans. Depending on the loan forgiveness program, you may have a share forgiven after 10-25 years of payment.
Fixed interest rates are the lowest available for student loans. Also, you can use the loans for any college costs. This includes tuition, other fees, room or board, supplies, and more.
These are only some of the many benefits of federal direct loans.
8. Look into Consolidation Programs
Got more than one student loan? Managing loan payments every month can be a real challenge. A consolidation or refinance program could help you there.
In essence, it combines your student loans into a single loan. The payment from these many loans also becomes a singular monthly payment. This way, you can focus on your studies more than your student loan.
Be Smart When Applying for Student Loans
Those are our 8 tips on getting student loans with bad credit. With these alternative funding tips, you should be able to enjoy and focus on your studies.
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