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College isn’t cheap. In the 2019-2020 school year, average tuition and fees were $9,400 for a four-year public institution, and $36,700 for a private four-year institution, according to the National Center for Education Statistics. (That dollar amount is per year, to be clear.)
While student loans are available to young adults and their families to help cover the costs, it’s not always easy for everyone to qualify.
Thankfully, there are options.
What Is a Student Loan for Bad Credit?
A student loan for bad credit is a federal or private loan available to people with a limited or poor credit history. These loans might carry higher interest rates, but private lenders typically take a full-picture approach to prospective borrowers including academic history, major and potential earning ability after graduation.
Banks, financial institutions and online-only lenders are a handful of organizations that offer student loans for bad credit.
Most lenders review a borrower’s credit history and credit score — and want to see a solid score, at that — when determining whether or not to lend someone money. If you haven’t had a steady work history, taken out a loan before or opened a credit card, it might be difficult for you to qualify for a loan or at least get one without a high interest rate. Similarly, if you don’t have a reliable, creditworthy cosigner in your network, it can also make qualifying (and at a decent rate) difficult.
That’s where student loan lenders — of both private student loans and federal student loans — can help meet this need.
If you have no credit history — or adverse credit history — these private and federal student loan lenders can help provide you with financing to attend college, a trade school or coding boot camp.
Student Loans for Bad Credit at a Glance
LenderLoan AmountFixes or Variable RateRate RangeCosigner Required
Up to $200,000
1.47% to 14.08% APR
Citizens Undergraduate Student Loan
$1,000 to $150,000
3.48% to 10.78% APR
Earnest Private Student Loans
Starts at $1,000
Starts at 0.94% APR
Edly IBR Student Loan
Up to $25,000
Federal Student Loans
$5,500 to $12,500 per school year
3.73% to 6.28%
$3,000-$15,000 per school year
7.49% (6.99% with AutoPay) to 12.99%
MPOWER Financing Student Loans
$2,001 to $100,000
Starts at 9.56% APR
Prodigy Finance Student Loan
Starts at 5.91% APR
SoFi Private Student Loan
Starts at $5,000
1.36% to 11.79% APR
9 of the Best Student Loans for People With Bad Credit or No Credit
Here are our top picks for the best lenders and companies that offer student loans. Most are private lenders and allow you to apply for funding directly on their website (or at least determine your eligibility).
Unless otherwise specified, rates and terms are for undergraduate loans. Also, while none of the lenders on the list required a cosigner (and some outright don’t accept them), other lenders do let applicants use them, which might result in better loan terms.
They are listed in alphabetical order.
Why Would Someone Want Student Loans for Bad Credit?
Student loans for bad credit are an option for borrowers who might not otherwise be able to secure a student loan from a traditional bank due to factors like bad or no credit. Without alternative student loan options, many students wouldn’t be able to attend school.
Some 43.4 million borrowers have federal student loan debt and the average public university student borrows approximately $30K to complete their undergraduate degree, according to Education Data Initiative. Without federal and private student loan options, higher education would be out of reach for many people.
To be sure, student loan debt is a major issue in this country — Americans owe $1.75 trillion as of 2022 — and it’s essential that student loan borrowers develop a debt repayment plan. But bachelor’s and graduate’s degrees can still put students on the path to higher earning potential over their careers.
All federal student loans are currently frozen until Sept. 1, 2022. This means that interest rates are set to zero and no payments are due until that date.
What Do You Need to Get Student Loans for Bad Credit?
When qualifying for a student loan for bad credit, you typically need (or need to be) the following:
A U.S. citizen or permanent resident
Your social security number and mailing address
A photo ID
A copy of your admission letter
The estimated cost of your program
Enrolled in a qualified program
Pursue a specific major or field of study
A high-achieving academic background
Again, this isn’t a complete list and not every lender will request everything listed above. And depending on the lender and type of loan, there may be other documents you need to qualify.
Some lenders might ask for and review your credit history, credit score and work history. For federal loans, borrowers will also need to complete entrance counseling and sign a Master Promissory Note before they can get access to the funds.
Some lenders can get you a rate quote in a matter of minutes online. And from there, you can upload the necessary files, sign your paperwork electronically and be on your way. In many cases, a co-signer with a good credit history and credit score can help improve your chances of getting approved for a loan, too.
Frequently Asked Questions (FAQs) About Students Loans for Bad Credit
There are a lot of questions about this topic and we’ve collected the answers to some of the most common.
Can You Get a Student Loan if You Have Bad Credit?If you have a bad credit score, you can likely qualify for a student loan. And some lenders don’t check your credit score at all (for instance, most federal student loans don’t require a credit check). However, if you have a history of not paying back loans, that could compromise your eligibility with some private lenders.
What is the Minimum Credit Score for a Sallie Mae Student Loan?
Sallie Mae doesn’t publicize the minimum credit score required for a student loan on its website. However, the company states that its private student loan decisions are based on application data and a prospective borrower’s creditworthiness (amount of outstanding debt, credit history, etc.).
Can You Get a Student Loan with Bad Credit and No Cosigner?
Yes, a student can get a student loan with bad credit and no cosigner. Federal loans, for example, typically do not require solvent credit and a cosigner. Depending on the private student loan lender, a borrower with poor credit and no cosigner might qualify for student loans, but could be faced with higher interest rates. Again, most federal loans don’t require a credit check or cosigner.
How is Loan Money Distributed?
Loan money is usually paid directly to the school. Any leftover money is released to the borrower. There may be different processes for federal student loans and private student loans (and different lenders, at that), so it’s essential that you check out the pay-out process for any loan you’re interested in applying for.
What Types of Students Qualify for Student Loans for Bad Credit?
Undergraduate students, graduate students, DACA students, international students and boot camp students can all qualify for student loans for bad credit. Certain lenders might not offer loans for every category of student. But, private loans and federal student aid are available to qualifying applicants.Before applying for a loan, a prospective borrower should make sure they meet the stated requirements, as well as check to see if their school or program is eligible. While some lenders cover many majors and universities, others have pretty strict guidelines on what subjects and schools are acceptable.
What is the Minimum Credit Score for a Discover Student Loan?
Discover doesn’t advertise the minimum credit score required to qualify for a private student loan. The company states that it bases a credit decision (and interest rate) on multiple factors — including your credit score, but not entirely determined by it.
Contributor Kathleen Garvin (@itskgarvin) is a personal finance writer based in St. Petersburg, Florida, and former editor and marketer at The Penny Hoarder. She owns a content-writing business and her work has appeared in U.S. News, Clark.com and Well Kept Wallet.
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
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