Bad Credit Student LoanWell, you’ve finally made the decision -- college it is! However, what if you have bad credit? Will that prevent you from attending college? Of course, it’s definitely easier to find a student loan with excellent interest rates if you have a sterling credit rating. Don’t give up yet though, as there is a way. For example, the Stafford loan - the most popular U. S. Department of Education loan - assumes that most high school students going straight into college don’t have a credit rating yet and so they don’t even consider credit rating as a factor when qualifying for college admission. Perkins loans, federal loans designated for the neediest students, are the same. However, if you have defaulted on a federally granted student loan in the past, this could interfere with attaining a student loan.Loans For Parents Even if your parents have a better credit rating than you do, you may still qualify for a bad credit student loan. PLUS loans, intended to cover the amount that the parent is obligated to contribute toward college costs, are one way to go, as the loan is granted to the parents instead of the student. Loans such as the Stafford and Perkins loans (U. S. Dept. of Education) assume that a portion of their children’s schooling is paid for by the parents. Federal Funding Versus Private Lenders Because it’s specifically designed to help make college more accessible, federal funding is a good choice for a bad credit student loan. Although their requirements are much looser than those of most banks and other lending companies, you may need to turn to private loans if you are unable to secure a U.S. Dept. of Education student loan. If you are graduating in a field with high earnings potential, such as law or medicine, you might want to consider using a private lender for a bad credit student loan. Conclusion Just remember all is not lost even if your bad credit student loan is at a very high interest rate. By the way, you may also be able to put together enough money to finance your college education through a combination of any or all of the above types of loans, so none of these choices are either/or possibilities. Many student loans give you time to improve your credit rating by deferring your student loan payment. These consolidation student loans, usually acquired at a better rate, may lower your payments to a more affordable level. |
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