Bad Credit Options for Student Loans

Bad credit shouldn't stand in the way of your education. Many education loans are still available for people with bad credit. Learn your options for a bad credit student loan here.

For High School Students

It's never too early to start thinking about your future. Prepare now to finance your education by looking into scholarships, grants, and the financial aid resources your top schools have to offer. You might also look over the FAFSA and even fill it out if you are close enough to entering college. Find out more about work-study opportunities and even any tuition assistance programs your employer may offer. You should also talk with your parents about their anticipated contribution and the possibility of parent or private loans.

For College Students

The costs of education are rising, but so is the amount of federal, low-cost support available. Some federal financial aid is not credit-based, like Stafford Loans, so you can find a bad credit student loan to help pay for your education. For non-credit-based federal loans, the only credit-related requirement is that you not have defaulted on any student loans in the past. The big-name federal loans available include Stafford Loans, Perkins Loans, and PLUS Loans (for parents). Each is explained below.

• Perkins Loans - these are low-interest rate loans from the government, but each college only gets a certain number to distribute each year. This is why it's important to fill out the FAFSA as early as possible. Perkins Loans have fixed interest rates and you have ten years to pay them back
• Stafford Loans - these are the staple of the federal financial aid program and usually carry lower interest rates than loans from private lenders. On the other hand, Stafford Loans usually have higher rates than Perkins Loans. These loans may be subsidized or unsubsidized, depending on your financial need. A subsidized loan means you will not be responsible for interest payments on the loan while you are in school. Stafford Loans are not credit-based, so this is your best bet for a bad credit student loan.
• Parent Loan for Undergraduate Students (PLUS) Loan - this is a loan for the parents of college students. With a PLUS loan, parents can borrow up to the entire cost of their child's education, minus any financial aid received. To receive a PLUS Loan, your family must pass a credit check and the student must meet certain eligibility requirements.

For College Graduates

Once you graduate from college, you will need to begin repaying your student loans. The good news is that you can consolidate your loans to cut your payments by as much as 60%. Consolidation means you combine your many loans with high or variable interest rates into one, fixed-rate loan with a competitive interest rate. You can pursue Federal Loan Consolidation or private loan consolidation.

For Graduate Students

Graduate school can be even more challenging to pay for than an undergraduate degree. Your bad credit doesn't have to prevent you from getting an advanced degree, however. Stafford Loans, for example, are not credit-based and are available to graduate students. In fact, you can get up to $18,500 with Stafford Loans. This can also be supplemented by private loans for graduate students. You might also want to look into scholarships, grants, and assistantships/work study opportunities to supplement your loans.

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