To assist you in comparing businesses side by side, Bankrates has ranked the best student loan lenders for bad credit based on factors such as interest rates, fees, term lengths, and features. The resources listed below can also help you through the process of assessing other funding options or applying for a loan even if you have bad credit.
Federal student loans are the best option if you have bad credit because they typically don’t require a credit check, have low interest rates, and offer strong borrower protections. But you can also apply for private student loans, which provide more flexible repayment terms and bigger loan amounts. Additionally, since income share agreements don’t have stringent credit score requirements, it might make sense to investigate them.
For the 2023–2024 academic year, the current federal student loan interest rate is 5. 50 percent for undergraduates and either 7. 05 percent or 8. 05 percent for graduates. Currently, rates on private student loans can range from 2 percent to 15 percent, but borrowers with bad credit should anticipate paying rates close to the top of that range.
Student Loans for Bad Credit or No Credit
Federal direct loans have some of the lowest fixed-interest rates available and offer a wide range of repayment options.
- More flexible repayment options for struggling borrowers than other lenders.
- While a student or during a deferment, interest is not collected on subsidies.
- Lower interest rates than many private lenders.
- No credit check or minimum income is needed to borrow.
- Undergraduate loan amounts: $5,500 for the first year, $6,500 for the second, $7,500 for the third year, and so on, up to a total of $31,000.
- Independent students and graduate students have higher loan limits.
- Undergraduate interest rate fixed at 3. 73%, while grad students get higher 5. 28% rate.
Ascent Non-Cosigned Student Loan
Ascent assesses your application based on factors such as major, earning potential, and attendance in school. It provides a future income-based option that does not require a co-signer.
- Among the best for payment flexibility.
- Grace period of 9 months is longer than most lenders.
- International students are not eligible.
- Students enrolled less than half-time, freshmen, and sophomores are not eligible for future-income based loans.
- Typical credit score of approved borrowers: Did not disclose.
- Minimum income: $24,000 per year for credit-based loan. No minimum for future-income based loan.
- Loan amounts: $2,001 to $200,000 annually, with a credit-based loan cap of $200,000 overall. $2,001 to $20,000 per year for future-income based loan.
Funding U Private Student Loan
- To obtain a loan, neither credit history nor a co-signer are required.
- Without doing a hard credit check, you can find out if you qualify and what rate you will receive.
- Loans arent available in 14 states.
- Payment required while in school and during the grace period.
- Typical credit score of approved borrowers: 650.
- There is no minimum income requirement, but borrowers must show they can afford to pay $20 a month toward their loan.
- Loan amounts: $3,001 up to $10,000.
A.M. Money Private Student Loan
Chicago Student Loans by A. M. Students who attend one of the A-rated schools, have a high GPA, and don’t have a co-signer are the best candidates for money. M. Money works with. Although it has ties to Illinois, it provides loans to educational institutions nationwide.
- Eligibility is determined by GPA rather than credit or a co-signer.
- provides a difficult-to-find, short-term, up to 36-month income-based repayment option.
- Every borrower receives a single fixed rate that is based on the rates of the federal PLUS loan.
- Works with a limited list of schools.
- Charges an origination fee.
- Does not allow for bi-weekly payments via autopay.
- The average credit score of those who are approved: No co-signer is necessary. Approval is based on GPA.
- Minimum income: No minimum. Approval is based on GPA.
- Loan amounts: $2,001 up to $50,000 in total, capped at the cost of attendance
College Ave Undergraduate Student Loan
- Without doing a hard credit check, you can find out if you qualify and what rate you will receive.
- More flexible repayment options than other lenders.
- Six-month grace period extension is available.
- Before requesting a co-signer release, you must be at least halfway through your repayment term.
- Typical credit score of approved borrowers: Mid-700s.
- Minimum income: $35,000 per year.
- Loan amounts: $1,000 up to cost of attendance.
ISL Private Student Loan
- Forbearance of 24 months is longer than many lenders offer.
- No late fees.
- Typical credit score of approved borrowers or co-signers: 670.
- Minimum income: No minimum income.
- Loan amounts: $1,001 or $2,001, depending on the residence and location of the school, up to the amount of attendance less any additional aid received.
MPOWER Private Student Loan
Despite having somewhat high interest rates, MPOWER provides a difficult-to-find service: student loans for overseas students without the need for a co-signer or a credit score.
- provides international and DACA students with a difficult to find option: non-co-signed student loans.
- Borrowers are assigned a dedicated student loan advisor.
- Up to 24 months of forbearance are available to borrowers, which is longer than many lenders allow.
- Payment required while in school and during the grace period.
- Offers only one repayment term: 10 years.
- Future income potential is taken into account by MPOWER, but credit scores are not.
- Loan amounts: Minimum $2,001. Maximum loan is $100,000, limited to $25,000 per academic period.
Edly Non-Cosigner Student Loan
- Borrowers have to repay 2. If they wish to repay the loan early, it will be 25 times what they borrowed.
- Low income forbearance is not automatic and interest accrues.
- Borrowers in Colorado, Iowa, Maine, Vermont, and West Virginia are not eligible.
Student loan options for parents with bad credit
Parents with bad credit have fewer options for parent loans. Youll likely need a guarantor or a co-signer to qualify.
Parent borrowers for federal PLUS loans must not have an adverse credit history, which is defined as a mark on your credit history caused by late payments, defaults, or bankruptcy.
In the event that your PLUS loan application is turned down, you may attempt to find an endorser—akin to a co-signer—who is eligible for a parent PLUS loan. Alternatively, you may file an appeal with the Department of Education and present proof of your exceptional circumstances.
Your best bet going forward is to search for parent-only private student loans that let you have a co-signer.
STUDENT LOAN RATINGS METHODOLOGY
The top 10 lenders by market share and top 10 lenders by volume of online searches, as well as lenders that cater to specialty or nontraditional markets, are included in our survey of over 29 banks, credit unions, and online lenders that offer student loans and student loan refinancing.
For every financial institution, we take 40 features and data points into account. These can include things like the option for biweekly payments via autopay, disclosures about minimum income and credit requirements, accessibility to borrowers in all states, longer grace periods, and in-house customer support, depending on the category.
The stars show ratings ranging from one star (poor) to five stars (excellent). Ratings are rounded to the nearest half-star.
Learn more about our editorial policies and student loan rating methods.
NerdWallet’s Student Loans for Bad Credit or No Credit
- Starting with federal undergraduate student loans, which don’t require a specific credit score, is where I can get a loan for education if I have bad credit. For private loans consider lenders like Ascent and A. M. Cash; ISAs such as Avenify or Stride Funding; or, if you’re an international student, MPOWER
- Is it possible to obtain a student loan with bad credit? Federal student loans are the best choice if your credit isn’t the best since they don’t usually require a credit history. The majority of private options demand excellent credit or good credit from a co-signer.
- What is the minimum credit score required to be eligible for a federal student loan? After using up all of your federal aid, you will normally need a FICO score higher than 690 in order to be eligible for a private student loan.
- How can someone with bad credit obtain a private student loan? To be eligible for a private student loan, you probably need a co-signer. Some lenders provide loans with no credit check or co-signer requirements; however, the interest rates on these loans are higher.
- Exist any student loans that don’t require a credit check? Federal undergraduate student loans don’t require a credit check. Even though some private lenders don’t have a minimum credit score requirement, they might still look for bad credit history, such as loan defaults.
FAQ
Can I still get student loans with bad credit?
Even with terrible credit or no credit history, you can still be eligible for a student loan. Nevertheless, qualifying will be harder, and rates will rise.
Can you get a student loan with a credit score of 500?
Generally, to be eligible for a private student loan, borrowers must have good to excellent credit, which is defined as having a credit score of at least 670. If you have a co-signer, lenders will typically approve you; however, if that isn’t an option, some lenders offer loans without requiring a co-signer or a credit check.
What is the minimum credit score for a student loan?
Typically, to qualify for private student loans—including refinance loans—you must have a credit score of at least 670. However, because private lenders treat their credit score guidelines as a trade secret, it can be difficult to determine the exact requirements. Applying is the only way to find out if you qualify.
Can you get a student loan with a credit score of 400?
Federal Student Aid All college students are eligible for federal direct loans, which have a fixed interest rate and are available to them regardless of their income or credit score. To obtain them, all you have to do is fill out the Free Application for Federal Student Aid (FAFSA).
Read More :
https://www.nerdwallet.com/best/loans/student-loans/bad-credit-student-loans
https://www.bankrate.com/loans/student-loans/bad-credit-loans/