How to Get a College Loan Despite Bad Credit
If you’re in need of a college loan for you child and you have bad credit, this might be the most important information you read all week.
If you have bad credit you may think it’s impossible to help your children meet their education finance needs.
There are some loans you may be eligible for even with bad credit, and there are several ways that you may not have to get involved in the loan process at all.
In fact here are 5 ways your child can secure financing for their college education.
Step One
Do your homework. Neither the Stafford nor Perkins loans require a credit check at this time. These are federal loans for traditional students.
Step Two
Perhaps the most important step in securing student loans is to complete the FAFSA, Free Application for Federal Student Aid. The FAFSA is the gatekeeper of sorts to federal student assistance. The FAFSA will put you on track not only to receive loans, but it will also help your child secure grant money if applicable. And, some states use information that you put on the FAFSA to determine your eligibility to state assistance. You’ll need your income tax returns to complete the FAFSA. If your child worked, you’ll need theirs, too.
Step Three
Apply for the Stafford loan. Stafford loans are either subsidized or unsubsidized, depending on who pays the interest while you’re child is a student. A Subsidized Stafford loan is for needy students, so if you have low-income and no credit or a cosigner, you will likely succeed in getting this loan. While the amount awarded in a Stafford Loan is small, it is a starting point.
Step Four
Apply for the Perkins loan, another federally-funded student loan. Perkins loans are usually designated for students who show the greatest financial need. The Perkins loan has a 5% interest rate and longer payback terms than the Stafford loan.
Step Five
If you are a non-traditional student, you may have a few more options available to you. While you still may only qualify for Stafford loans and Perkins loans, there are many scholarships and grants available for students returning to college to pursue degrees.
Private College Loans
Student loans that are obtained from private sources, such as banks or credit unions, generally do require a cosigner. However, if your child has very good credit then they may be able to obtain one without a cosigner.
It is more than possible to obtain student loans without a cosigner – in fact, it is highly likely that your child can. Federal student aid is available to almost anybody to make college more affordable, and no cosigner is necessary.
Getting additional funding through private loan options can prove to be more of an obstacle. These types of loans almost always require a co-signer. And if your credit is less than stellar, you will get hit with higher rates. Or possibly even denied.
Related Articles:
5 Tips on Paying for College if You Don’t Get Enough Financial Aid
FAFSA Frequently Asked Questions: Loans, Student Aid Reports and Divorce
Recent Changes in Student Loans: “Losing the Middleman”
