Going to college is a very expensive business and most students resort to taking out loans to fund part of the process.If you are worried about not being able to take out a new student loan now that you are off to college, because you have a bad credit history then do not despair because there are ways around this. Even if you no longer qualify for certain loans there are various options that are available to you that if you find yourself in need of a bad credit student loan. There are Federal Stafford Loans, Perkins Loans, Pell Grants and other kinds of grants and scholarships.
Bad Credit Student Loans: What Do You Need To Disclose?
The good thing about these options is that it doesn't matter how bad your credit score is as they are not based on a credit check, so you won’t have to answer any questions about your financial status although collateral may be required in some instances but not all.
Bad Credit Student Loans: The Stafford Loan
There are two kinds of federal Stafford loan – subsidized and unsubsidized. These are relevant to all students regardless of their credit history as it is not a consideration. The subsidized Stafford is based on the economic needs of the student and the government pays the interest on the loan. The unsubsidized Stafford Loan is available to every student, regardless of need but the amounts given are not substantial but you can reapply every school year.
Bad Credit Student Loans: The Federal Perkins Loan
This is another loan subsidized by the government which does not require a credit check. Both undergraduate and graduate students can apply with loans of between $1000 and $4000 awarded in any one school year. In total you cannot borrow more than $20000.
Scholarships and Grants
Nearly every state government gives out grants and scholarships as do many professional bodies so it is worth doing some research, depending on your chosen subject, as these institutions will not be interested in your credit history.
Disadvantages of Bad Credit Student Loans
On the whole it is relatively straightforward to get a bad credit student loan. However, interest rates of these bad credit student loans are higher than a normal student loan because of the increased credit risk. If you have to borrow money then make sure you only borrow what you really need. Try not to overstretch yourself as you don’t want to end up in debt forever.
By: L Davies