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How to get a student loan even if you have bad or no credit

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Yes, it is possible to get a student loan even if you have bad credit or no credit.

When you’re young, you may not have the credit history necessary to get some types of loans. But don’t worry, it’s possible to pay for college with student loans.

On the other hand, early choices about money can come back to bite you later. For example, say you get a credit card at age 18 and then don’t pay your bills. This hurts your credit score early on and makes it harder to get other loans later. Even if you realize the error of your ways, this small infraction can come back to haunt you for a long time.

So what happens if this is your case and you need to take out a student loan? Can you still get a student loan if you have bad credit or no credit?

Before you get started, be sure to research the best student loans to pay for college.

Let’s explore our options!

Need-Based Federal Student Loans

Your best option for student loans, whether you have good or bad credit, is a need-based federal student loan. Need-based student loans are based on eligibility requirements, which are calculated when you fill out the FAFSA. The FAFSA takes a lot of information from your taxes (and your parents’ taxes) and runs it through a formula to calculate your expected family contribution (i.e., how much you could theoretically pay for college).

Once the calculations are done, you’ll know if you qualify for a need-based student loan. Currently, you must meet the following criteria:

These loans are ideal for students with bad credit because your credit score isn’t factored into the eligibility calculation, so even if you have poor credit, you may still be able to qualify for this type of loan.

Non-Need-Based Federal Student Loans

You may be able to get a federal student loan even if you don’t have need based on the Student Aid Index calculation. do not A credit check is required.

You can get one of the following:

  • Federal Direct Unsubsidized Loans
  • Federal Graduate PLUS Loans

These loans usually allow for larger amounts and are not contingent on your credit score, so even if you have a low credit score you can still qualify for a loan. Your school’s scholarship office can help you.

Check out the best student loan interest rates here >>

Subsidized vs unsubsidized student loans infographic

Federal loans that require a credit check

The only notable exception to federal loans is the Parent PLUS Loan We’ve spoken at length before about how we don’t think parents should go into debt to pay for their children’s education, but the fact is that many parents still do.

A Parent PLUS Loan does not rely on your credit score like a traditional loan would, and qualification is not based on your credit score. However, to qualify for a Parent PLUS Loan, you must: you must do not have Unfavorable Credit HistorySpecifically, this means you must not have:

  • Current delinquency
  • Have defaulted or charged off more than $2,085 in the past two years
  • Default, bankruptcy, foreclosure, repossession, tax garnishment, wage garnishment, or cancellation of federal student loan debt in the past five years

In some cases, to get around these requirements Appeal (rare) or getting a co-signer with a good credit history (more common).

But at the end of the day, remember that we would never recommend that parents take out loans to pay for their children’s education.

Private Student Loans

Finally, there are private student loans, which most borrowers should avoid unless they have a specific reason to do so (such as going to medical school).

If you have bad credit, it can be hard to get a private student loan. Unlike federal student loans, private student loans do Check your credit score. If you have a low credit score, banks may require a co-signer for your student loans. Learn more about student loan options without a co-signer here.

If you don’t have a cosigner, you may not be able to get a private student loan if you have poor credit.

Be sure to check out our list of the best in-school private student loans for more information.

Know your credit score

The key in all of this is to stay aware of your credit score. If you need to borrow a loan, you need to know what you may or may not qualify for based on your score. Additionally, if you are looking to borrow other loans with bad credit, you should definitely know your credit score.

Credit Score Range

That’s why I encourage everyone to check their credit score using a free service like Credit Karma. Credit Karma is completely free and doesn’t require a credit card or anything to sign up. Once you sign up, you can view your score and other tools that can help you improve it. You’ve probably seen their commercials on TV and I use them myself.

What do you think about taking out student loans with bad credit?

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