Bad credit is a detriment to making education accessible, especially if you want to pursue higher studies. Some people shy away from it, fearing they won’t get a good loan that will allow them to pursue the degree they want. The truth is, there are options available for people with bad credit if they’re looking for student loans. Many of these loans don’t assess your credit and still offer friendly terms to their borrowers.
Types Of Student Loans For People With Bad Credit
The first thing you need to know is that some federal student loans from the Department of Education do not need credit assessment. It’s why they are accessible to students who have no credit score and can help those with bad ones. Showcasing good payment behavior can even improve your credit in the long run. Here are the federal student loan options available to those with bad credit:
PLUS loans: While this federal plan has a credit check, you can still qualify for it with bad credit. However, there will likely be more requirements or higher interest rates.
Unsubsidized loans: For an unsubsidized loan, borrowers must pay the interest throughout the loan period. It’s easier to qualify for this loan as you don’t have to prove a financial need, nor does the loan require a credit check.
Subsidized loans: To qualify for this loan, you’ll have to prove that you have a financial need. If you are approved for this loan, the government will pay for the interest throughout a set period. This loan also doesn’t need a credit check.
Private Student Loans
Private student loans are also an option for those who don’t qualify for federal loans. Others max out their federal loan limit and may need to look into other loans. The problem with most private loans is that they often have a credit check. While they can approve you even if you have bad credit, you may end up in a deal with high-interest rates.
To ensure that you get the best possible deal, you will have to shop around different lenders and compare their rates. Don’t apply immediately when you are looking around as an application can hurt your credit score if you do it in succession.
Are There Other Options?
One way to get around the strict requirements of some student loans is to get a cosigner. A cosigner is someone who has established credit and can share the responsibility with you. It means that if you fail to pay the loan, the cosigner will have to carry the burden with you. Typically, you’ll want to do this with a willing family member or relative.
Other loan programs look into things apart from your credit score. For example, some programs can give you loans if you prove that you perform well in school. They can also look at other aspects such as athletic skill, arts, awards, and more.
Student Loans Are A Big Deal
Remember that when you are getting a student loan, you are committing years of your income to pay them off. They can get expensive, and many spend upwards of a decade trying to pay their debts. As such, you want to get the best deal possible so that you pay less. You’ll also have to consider good payment strategies that can accelerate your path to being debt-free.