Obtaining a student loan when you have bad credit is possible. Finding the program that is right for you will take legwork. Below are some ideas you can apply to surpass your bad credit and obtain a student loan. Keep in mind that your school of choice may recommend their lenders however you are not required to use them. If you do not use them, it will not penalize your acceptance possibilities.
Big Brother
It is not always a bad thing to turn to the government for assistance. Federal student loans are readily available for those who apply and the good news is that some do not require a credit check. In fact, there are two federal loans that you should immediately submit an application for. They are, Federal Stafford Loans and Federal Perkins Loans. Remember these are not grants, they must be paid back.
Federal Stafford Loans
The subsidized level of this loan means that the Education Department will pay the interest on your loan for the duration of your schooling as well as the first six months after you graduate. The requirement for a subsidized Stafford loan is that you must prove financial need according to their requirements. If you cannot prove financial need you can apply for their unsubsidized loan. There are a few extra things to take into consideration when applying for a Federal Stafford Loan. If you are a dependent of your parents you may be able to receive a yearly, increasable loan. If your parents are turned down for a PLUS loan, Stafford may offer you more money. Independent students may be able to obtain a better package.
Federal Perkins Loan
This loan offers a low interest rate (about 5%) and is specifically geared toward students in dire financial need. This may include you if you are no longer a dependent and struggling to get by. Age restriction does not apply however, as a freshman, you may not be eligible.
Other Loans
FFLP – Federal Family education Loan Program
FDLP – William D. Ford Federal Direct Loan Program
Free Application
Those with bad credit already know that paying exorbitant application fees for multiple loans can be difficult. The FAFSA, the Free Application for Student Aid, is FREE and helps you to apply for all of the government loans indicated above Their site walks you through the process complete with an online chat option for help. Your application is electronically sent to your school if they are set up with the Department of Education.
When you have challenged credit issues your best choice is turning to federal assistance. Private bad credit loans may accept you at dizzying interest rates and other small print restrictions and will ultimately be incredibly difficult to pay off. Also, many schools offer Financial Aid advisors to help you in every way they can to get you to come to study at their institution even if you have bad credit. In addition, it is important not to miss a loan payback payment once you have completed your education. This will only deepen your cycle of bad credit and make it difficult to enjoy the education you just paid for.