For many students, taking out a loan to help pay for college is their only option. Borrowing from a lender that caters specifically for student loans, helps secure favorable interest rates and a more flexible repayment. The two main lenders of student loans are the federal government and private lenders. It is recommended that a student considers all federal sources first. This is because federal student loans generally carry better interest rates, have better repayment terms and most require no credit check. The con for federal loans is that there are limits on how much you can borrow. Because of this, many students take out private loans to supplement what they get from the federal government.
Student loans for bad credit
Many students will struggle to secure a loan with their credit history. They either do not have good credit or they have no credit history. In that case they look for student loans for bad credit. Most private student loans require a credit check. Private lenders will require that the borrower has good credit history before they can borrow. If a student has bad credit, they may still be able to borrow through a co-signer with good credit history.
The federal government has several loans that do not require a credit check. The first thing you need to do to receive a federal loan is student loans for bad creditcomplete the FAFSA. The FAFSA is the only application for all federal loans. With the FAFSA, the federal government is able to work out how much money you need to borrow. They put together a total financial aid package for you that include loans, grants and scholarships.
Federal student Loans for Bad Credit
Most federal loans do not require a credit check and are therefore the best loans for students with bad credit history. These loans are primarily need based. The amount you can borrow will depend on how much you need after all other sources of funding have been determined. It may also depend on the availability of funds so it is important to apply early. The following are the federal student loans for which students with bad credit can apply to.
Federal Direct student loans: The William D. Ford Federal direct loans program, formerly known as the Stafford Loans, are loans borrowed directly from the federal government. Students have two options when borrowing from the Direct Loans program. They are the Subsidized and Unsubsidized Direct student loans. Students applying for either of these options do not require a credit check.
Perkins Loans: The Perkins Loans program is the largest source of federal loans program in the country. This loan is a need based loan administered through participating institutions. Undergraduates can borrow up to $5,000 per year and a total of $27,000. Graduate students can borrow up to $8,000 per year and a total of $60,000. This loan also does not require credit check and is therefore a perfect bad credit student loan.
Private Student Loans Bad Credit
For students looking for private personal student loans, their bad credit could be a road block. The get a private student loan for bad credit, you will need to borrow with a cosigner. The cosigner guarantees to pay the loan back if the student fails to do so. Lenders therefore require that the cosigner be someone with good credit history. They may also require a collateral before a loan can be approved.