Your Options in The Bad Credit Student Loan Market

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If your family has been having trouble with its credit rating, the trouble you might have funding college with a personal loan or with a student loan might be so great, it might discourage you from attending college altogether. If you have been out looking for a bad credit student loan, you could be forgiven for thinking there just are none – that such a thing doesn’t exist. But that wouldn’t really be true. If you or your family have been struggling with a poor credit score, there are a few loan providers that deal very well with people who have problems just like yours. Let’s look at a few lenders who don’t really look that closely at your credit score before they approve a student loan.

First up is the Perkins Loan. If your loan is need-based, the Perkins loan might just be the right answer for you. Their terms can be pretty easy if the worst problem you have is a poor credit score. Unless you have defaulted on a federal student loan or another student loan before, you could probably qualify for a Perkins need-based loan very easily. Perkins isn’t the only player in the field though. The Stafford student loan company, while it isn’t exactly aimed squarely at the bad credit student loan market, does work very well for applicants at a credit rating disadvantage because their loans aren’t made based on your credit score. Again, unless you’ve defaulted on a student loan before, you can qualify with Stafford even with bad credit. You just need to apply with a filled-in FAFSA form. And it doesn’t even have to be need-based.

So far so good; what do you do if your Stafford loan or your Perkins loan comes through, but they don’t really reach the level you need? That’s where something like a Parent Plus loan might come in. They do a run a credit check on one of these; but not a eally deep one. If you are a parent who has unpaid loans nd  poor credit or anything else on your credit record, you can still qualify, as long as none of the damaging stuff on your credit report is at least five years old. You mustn’t think that all you need to do to get a loan is to go private. Sallie Mae for instance, is the biggest private lender there is, and they will completely look through your credit report before they part with a dollar. You do always have an option in finding a co-signer for your loan though.

Make sure that you don’t sign up for any loan that charges you unconscionably high rates of interest – as the FTC warns you. It might seem fine when you’re actually taking out the loan. Twenty years down the line, it really can’t some like that good an idea anymore.


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