Getting a Student Loan With Bad Credit and Without a Cosigner

There is a big misconception that college is only for people that have money, or for people that have the ability to borrow money. Many people may think that having little money and bad credit will deny them the opportunity to attend college. The truth is that you can go to college and get your degree with little money and with poor credit too. There are a number of federal student loans and even private loans for people with no credit. Additionally, there are federal options available for people without needing a cosigner. To sum it up, there is money available for you to go to college regardless of any financial situation or credit status.

Bad Credit

The fact that you are attending college means that you can get a bad credit loan. The Stafford and Perkins loans are two options that college students can get despite their credit or their parent’s credit score. You cannot get another loan with the same interest rates and financing terms for anything else other than college if you have poor credit. The only requirement is that the funds should only be used for necessary college expenses, including tuition and fees, books, living expenses and other college related expenses.

Guaranteed Acceptance

The reason you can get a loan for college even when you have bad credit is because the federal government guarantees your loan against default with your lender. They can do this because there are several ways the federal government makes sure that it is paid back when you graduate. The government also has a number of payment plans, deferments and forbearances available if you have trouble making the payments when using the Standard Repayment Plan.

Credit Score and Credit History

The main reason the federal government is willing to guarantee your loan is that most students starting out in college are too young to have had enough of an established credit history to get a traditional loan. Credit scores are partially determined by how long a person has had a history of borrowing and repaying money. Most incoming students are around 18 years of age, and most don’t even have a credit card in their name yet. Although their credit score isn’t necessarily bad, they don’t have a high enough credit score to get the amount of money they need for college. This is why it’s possible to get a college loan with bad credit by getting federal assistance such as the Stafford or Perkins loan.

Without a Cosigner

You can also get assistance without needing a cosigner. Most loans made to people with no credit are done through the use of a cosigner with good credit. A cosigner is responsible for paying back what’s borrowed should the borrower fail to make the payments. Many private loans are made to people with a low credit score by using a cosigner. However, federal loans, such as the Stafford and Perkins, do not require a cosigner for applicants with bad credit. This is good news to students who may not have someone willing to co-sign for them where thousands of dollars are at stake.

No Need for Parents

You may need to depend on your parents to help you with some of your college expenses, but you can also tell them that you can handle the bulk of your college expenses on your own by getting financial assistance federal without a cosigner. Some parents will consider the Parent Plus to help their students with college expenses, but these are in the parent’s name. If you want to get your own college loan in your own name without a cosigner, then the Stafford or Perkins option is the ideal for you. Students that have good credit can also get a private assistance without having a cosigner. Some private lenders offer better interest rates and payment plans than federal, so students with good credit may want to consider this option too.

Options: The Best Loan for Me

It’s a wonder how someone doesn’t get confused with all of the different options available for students. If you are confused on what to do, then the table below will help you understand some of these options. There are many options available to you, but the four described in the table below are the most common.

Most Common Student Loans Used to Fund Education – Loan Type Bad Credit Cosigner Key Benefits

Loan TypeBad CreditCosignerKey Benefits
Stafford-Subsidized and Unsubsidized LoansOKNone NeededMany options available during repayment. Interest does not accrue while you are in school with a subsidized loan.
Perkins LoansOKNone NeededFixed Interest. Available to those students demonstrating extreme financial need.
Private Student Loans (most lenders)No. Good credit is neededOnly if borrow has bad creditMany lenders require no origination fees. Interest rates are lower for many private student loans.
Parent Plus LoansNo adverse credit. (no collections, bankruptcy, foreclosures or repossessions)Only if borrower has bad creditLoans can be put in parent’s name. Students credit is no an issue.

The Bottom Line

As you can see, it’s possible to get a student loan with bad credit and without a cosigner. There are also other options for funding your college education, like private loans, that require good credit and/or a cosigner, and you may even benefit from better interest rates or no origination fees. Even parents can take out assistance for their kids if they wish to keep the debt in their name. Financing college doesn’t have to be a barrier for those students wanting to go. A wide variety of college loans are available through both the federal government and private lenders.