Nowadays even bad credit history cannot be an obstacle that may ruin your chances of asking for a student loan program.
It can somewhat reduce your options but not ruin them.
Generally, you can consider two major alternatives which are federal and private loans.
Additionally, you can count on getting a scholarship, a federal grant or work-study option.
Federal Loan Programs for Students
The US government provides personal loans for students with bad credit scores. Or, to be more precise, it provides such federal loan programs as Perkins, Stafford, Ford Direct Program and Family Education Program (FFELP) regardless of your creditworthiness (i.e. there is NO credit report check).
To see if you qualify for any of the programs mentioned, you have to fill in the FAFSA form.
Below there are additional relevant facts:
- Federal loans are subdivided into subsidized (no interest charge during school and deferment periods) and unsubsidized (interest charge during all periods).
- Another subdivision includes loans for parents (is the primary borrower), undergraduate and graduate students.
- Federal loans are used for covering expenses related with education (college tuition, textbooks, room and board stuff).
- All federal loans charge substantially low interest rates.
- Some loan programs (e.g. Perkins) provide a grace period (usually 9 months).
Private Loan Programs for Students
Private loan lenders are more reluctant to provide bad credit borrowers with an option of asking for personal loans for students.
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Seldom this is connected with a bad credit score itself.
More often private lenders eliminate such applications because of the ‘lack of income while being a student’ matter.
Besides, students require long loans and flexible payment options.
All these factors rather than your credit history either poor or good affect the entire private student loan application deal.
Generally, private student loan programs are usually applied for to cover costs that are not stipulated by a federal loan.
To get it you have to take the following steps:
- You will find a lender even having a poor credit score, thus, shop around as much as possible in order to get the most favorable terms.
- You will hardly pay off your loan quickly so carefully negotiate your interest rates.
- Negotiate the loan structure and payment options. Here fixed rates and flexible payment options would be more agreeable.
Even such a challenging task as requesting personal loans for students with bad credit history may be successfully solved if tackled properly.