Student Loans are common forms of financial aid intended to help students with financial difficulties i.e. those students who can’t afford paying for college tuition and/or accommodation expenses. Because student loans are tailor made for students, they attract lower interest rates. They are also more flexible compared to other loans. Private lenders and the federal government are the two main student loan lenders. Other institutions such as state governments also offer/distribute student loans.
Bad credit student loans
It is important to note that bad credit loans for students do exist! These loans refer to loans issued to individuals with poor credit scores/history. Bad credit student loans are therefore loans given to students with a bad credit history. It is possible for a student to get a bad credit loan if the student applies for the loan through a co-signer with an excellent credit history. In most cases, it is impossible to get a student loan on your own if your credit rating/score is poor. Using a co-signer with a very good credit score/rating offers a suitable option for getting student loans even if you have bad credit.
It is possible to find lenders who don’t solely rely on FICO scores to approve student loans. Such lenders consider all aspects of your credit history when evaluating your student loan application. A good example of student loans offered to students with bad credit are Federal student loans. Such loans are offered on basis of financial need. These type of bad credit loans are discussed below among other types of student bad credit loans.
Types of bad credit loans for students
1. Federal student loans
As mentioned above, Federal student loans are a good example of bad credit loans given to students. This is because students can qualify for these loans without providing their credit history information. Students receive subsidized or unsubsidized federal student loans i.e. Stafford loans depending on their financial needs. The loans attract very low interest rates which are usually subsidized by the government i.e. the government pays all interest accrued on the loan when the student is still in school.
2. Bad credit private student loans
There are certain types of private student loans. Bad credit private student loans are available only for those students who have co-signer/s with excellent credit history/rating. There are many private lenders offering private student loans to students with bad credit therefore you shouldn’t have a problem getting these type of loans.
Bad credit loan options/example
Most students with bad credit scores/history think it is impossible to get good student loans. This is however not the case. There are very many educational loans offered even if a student’s credit score is poor.
Students with poor/bad credit scores can apply for student loans or financial aid options such as; FAFSA. This loan option is need based (offered to students in need of financial assistance) and is available for student who have bad credit. Students can apply for this loan option online by simply filling out an application form that requires complete disclosure of the financial conditions of the students and their families.