Bad Credit Student Loans
Having an education is important. It affects the type of job you can get, which in turn affects the type of lifestyle you can have. However, a good education often comes with a heavy price tag, causing several students to need to apply for student loans in order to cover expenses. If your credit isn't perfect, there are bad credit student loans out there that can help you get the money that you need to finish school.
There are options for students who need bad credit student loans. While it is true that the better your credit rating is the easier it is to find student loans with better interest rates. However, many students go to college straight out of high school, meaning that they have no credit rating yet, and others may have had some bumps in the road that caused their credit rating to become slightly tarnished. There are several federal loans out there for students that do not take into consideration a person’s credit rating when deciding on approving an application. These include Stafford loans, which are designed to help students with no or bad credit, and Perkins loans – loans that do not require a credit check, among others.
If your parents have good credit rating, you may also qualify for other types of loans to avoid getting bad credit student loans which may have higher interest rates and fees. Since federal funding assumes that parents will help cover a certain amount of education costs, there are loans out there that make up that difference. This can be a big help if your family falls outside of the income bracket to qualify for many federal student loans or scholarships, or if you have moved out of the house and are paying for college on your own.
One of these options is private loans. If you are going into a field that has a high earning potential, such as medicine or law, you may be able to receive bad credit student loans from private banks and lenders. This is because the lenders assume that you will graduate and get a job in a field that will give you a salary that will allow you to pay back the loan with little difficulty.
None of the loan options are mutually exclusive either. Many students use a combination of different loans to help them complete school. Even if the bad credit student loans are a higher interest rate, it is not lost – you can often defer payment until you have graduated, at which point you can look to consolidate the loans into an easier payment at a better rate. Or, if you do not qualify for a loan consolidation, paying the higher rate with on time, monthly payments can often improve your credit score enough to qualify you for a better loan down the road.
All these different loan options may have your head spinning so you will want to take some time to understand school financing. There are websites designed in helping you find and apply for different scholarships and the whole process involved. Looking into the descriptions of different loan programs, from federal loans to loans for certain fields.