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Student Loans For People With Bad Credit

Student Loans For People With Bad Credit

Student loans are a form of financial aid designed to help students afford a college education. As these loans are tailored for students, they have low interest rates flexible repayment terms that enable students to repay the borrowed amount with ease. The federal government and private lenders are the two main sources of student loans, though some state governments distribute them as well. Federal student loans generally have lower rates of interest compared to private student loans, though they may not cover the complete cost of education. When federal student loans aren't enough, private student loans can be very helpful in filling the financial gap.

About Student Loans for Bad Credit

Student loans for bad credit do not really exist because student loans, in general, are loans that are specifically designed for students who have a good credit history, not a bad credit history. It still may be possible, however, to get a student loan if you apply with a co-signer who has excellent credit, because their good credit may help to offset your bad credit. It is generally true that you cannot get a student loan if your credit score is not good; but some do not rely solely on the FICO score to make approval, they will look at all of your credit history into consideration when evaluating a potential borrower's loan application. Federal student loans, for example, are an example of student loans for bad credit, as they are awarded on the basis of financial need.

Federal Student Loans

Federal student loans are essentially student loans for bad credit, as they do not require a credit check. Students can receive subsidized or unsubsidized Stafford Loans to meet educational expenses, with different loans available depending on financial need. Certain need-based loans, such as subsidized Stafford loans and Perkins Loans have extremely low interest rates, and are also subsidized, meaning the government pays the interest that accrues on the loan while the student is in school.

Private Student Loans

There are also certain private student loans for bad credit available for borrowers but only if you apply with a co-signer who has excellent credit, such as a parent or other relative. For these student loans for bad credit, a student borrower must have a cosigner with a strong credit history. He/she can be a family member, a relative or a friend with a good credit history. You can get in touch with some private lenders who can grant you this type of loan, helping you to utilize private loans to pay for college despite bad credit.