I believe that our broken system can be fixed when we pursue education. However, it’s understandable that pursuing the higher scales of academia can be expensive. Many of us opt for loans, but bad credits have made it difficult to get further monetary assistance.
Now, what options will you have as a student when you have bad credit? Well, worry not. We have you covered with various alternatives.
Apply for a federal loan
Federal student loans are the best alternative for students who have no credit history or are burdened with bad credit. The government provides them. Federal loans are known to be having flexible and cheap payment options that can be managed by students from various backgrounds.
We have four types of federal student loans that can favor you.
Direct subsidized loans
Federal loans fall into two types, which are subsidized and unsubsidized. If you are an undergraduate with dire need of financial aid, you can settle for the subsidized ones. The government covers the interest of this loan, whether when in school, during your grace period, or they pause payments when you have deferred your studies. The amount you can request will be determined by your college the same to your eligibility.
Direct Unsubsidized loan
The difference allying subsidized and unsubsidized loans is that the unsubsidized one is available for both graduates and undergraduate students. Also, your financial need will not have to be shown. As the borrower, you will be responsible for catering for the interest incurred from the loans at all times. Unsubsidized loans also have higher loan limits compared to subsidized loans.
Federal Direct Plus Loans
This type of loan is present to graduate students and their parents. This kind of loan has a higher interest rate compared to any other federal loans. However, if you have a bad credit score, it may be difficult for you to get this loan. But, if you can find a co-signer with good credit, you can be considered for the loan.
Perkins loan
This kind of loan has been obsolete since October 2017. It was available for students who borrowed the money and repaid it to their school fees. Currently, those who are in public service can and have huge outstanding loans can apply for the Perkins loan forgiveness.
Apply for private student loans
A bad credit score is rated between 300 to 629. When you fall here, there is no need to worry. You already qualify for private student loans bad credit. Banks and other financial corporations give private loans to students. The lender will always want to see proof that you will clear your loan. As such, if you have poor credit, you can always tag along with a co-signer with good credit who will be responsible when you fail to pay the loan.
Here are some of the private student loans that are available:
Credit union loans
These are loans offered by credit unions and banks. If you are a member of these institutions, you can access loans with favorable terms than more prominent financial institutions. One such institution is Lendkey, which connects borrowers with loans from credit unions and community banks.
Student loans with co-signer
For a bad credit to be sanitized, you will need to get a co-signer with a good credit record. With this, you will at least be sure of getting better interest rates. Let your co-signer have a good credit score and a steady flow of income.
Your co-signer must be either a close friend or a family member. The co-signers often act as security for the loan. One example of such loans can be gotten from Sallie Mae.
Student loans without co-signer
If you are an undergraduate, in particular, you will need a co-signer to access many loans. However, if you can’t access one, few lenders can access your ability to pay before offering you a loan.
When looking for a lender, it’s advisable to do some research first. Focus on lenders that give you the lowest interest rate. Some of the lenders without credit or co-signer requirements include FundingU, Ascent, Citizens Bank, and LendKey, among others.
State loans
Although various states offer their loan programs, many of them often behave like private lenders hence classified as private loans. You can check on such loans from the education database under state loan options.
International student loans
This type of loan is available for students who are not U.S citizens; hence can’t qualify for federal loans. However, several private lenders can offer private student loans for non-citizens. Most of these lenders often require a U.S citizen co-signer.
Wrapping up
Nothing should come in between your academic journey. It would be best if you had the focus to achieve your dream, and destructions such as finances should be given no chance. With Bad credit, you still have the above options to seek help. Try one today.
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