As a student, specifically if you are supporting your education by yourself, raising the money to pay for the tuition can be very challenging. Aside from the fact that you may not have enough time to work and study at the same time, you also can’t easily obtain funds from commercial lenders knowing that you have not established a good credit score yet. Fortunately, there are some other means to raise your school money and some of these include federal, private student and bad credit loans.
Bad Credit Loans for Students from Federal Government
Federal loans are among the easiest means for you to secure funds for education. Among the most popular are the Perkins Loans and Stafford Loans – both are provided by banks. Should you qualify, your loan will be backed by the US Department of Education. This means that the government may pay for the interest rate. Otherwise, you will pay the loan in instalments but with the first payment due months after you graduate.
It is important to understand that these loans are different from grants. While loans have to be paid, grants are given for free. Applying for federal loans comes with a lot of requirements, including the completion of FAFSA. The best thing about federal loans is that they are not like the typical bad credit loans with high interest rates.
Private Student Bad Credit Loans
If there is one downside to federal loans, it would be their limited coverage. With this, you have to look for other sources of funds to keep up with the school fees so another option available for you would be the private student loans.
However, these loans usually come with interest rates that are as much as 4% higher than the government ones. They can be considered as bad credit loans as they are offered whether you have a good or bad credit score or even if you don’t have any credit history at all.
However, you may need to present a co-signer if you have a bad credit. A co-signer can be your friend or family member with good credit. His/her name will be tied to the bad credit loans until a specific period of time or typically after 36 to 48 of subsequent of timely payments.
Other Options for Bad Credit Loans
If you are a working student, you may have a good chance of approval if apply online. This is as long as you meet the lenders’ requirements. Generally, lenders require you to be at least 18 years old, a US citizen with regular monthly income.
If even the option of bad credit loans is not for you, your final option would be to take out a loan from your employer or apply for some programs they sponsor – if that’s applicable. You may need to have good grades in order to do so. Scholarships are also great as organizations don’t mind your credit score and not even your grades.