Unfortunately for those with bad credit or no credit, finding a student loan can be a very difficult proposition. Even with the additional protections that lenders have over their debtors with student loans, they still will be very hesitant to provide a student loan to someone with bad credit.
The Big Exception
The notable exception is Federal Student Aid. A bad credit score will not stand in your way in most cases when you are seeking student loans through the government. You can get a Federal Student loan by filling out the FAFSA and completing any necessary paperwork with your financial aid office. A Federal Stafford loan offers an excellent rate without any credit check required. If the government determines that you have a high financial need, they will even subsidize your interest while you are in school. The downside to these loans is that they are very limited, especially for undergraduate studies. Graduate student loans have some credit requirements, but even these are much lower than what is required to secure a private loan.
Finding Private Loans
If the federal student loan is not sufficient to cover your expenses, you may have to resort to a private student loan. In this situation it is almost always necessary to find a cosigner. For many students with bad credit or no credit, this is the last option for finding a student loan. Banks simply are not willing to take on the risk of an unsecured loan with someone who has a bad or negative credit history.
One final consideration when it comes to getting to student loans with bad credit is to watch out for lenders trying to take advantage of your difficult financial position. They may try and offer a loan with interest rates at credit card levels and terms that make compliance very difficult to comply with.
If you find yourself in this situation, the smartest move could be to save money and delay school or to choose another school. Spend a little time looking through this website and check out how student loans affect borrowers. These days many people regret taking out the loans they did. It may not be what you want to be told, but getting student loans is not always the best option. If you cannot find grants and scholarships to fund your education, looking elsewhere might be the most prudent choice.