Many students and their families must find a way to pay for tuition, books, fees and more. One of the more common ways for individuals and their families to pay for college education expenses is to use student loans. However, some people have lower credit scores, and they may not think that they can qualify for student loans.
The unfortunate reality is that many people have lower credit scores because of a serious illness in the family, the unexpected loss of a job and other factors that are not related to their creditworthiness. If you have bad credit scores, the good news is that there are still a few options available for you to get a low-interest rate on a student loan and to pay for your college education. By exploring the funding options available, you can more easily pay for your college education and pursue a brighter future.
Federal Student Loans for Undergraduates
You may think that your credit scores would be reviewed for any type of student loan that you apply for, but this is not actually the case. If you are preparing to enroll in an undergraduate program, you can apply for federal student loans without having your credit scores checked. These are loans that the students will apply for rather than the parents. There is no credit check required for unsubsidized and subsidized federal student loans or for Perkins loans. You can easily learn more about your ability to qualify for these loan options by filling out a FAFSA or a Free Application for Federal Student Aid. This form is available online and can be completed within 30 minutes or less in most cases. By taking this important step, you can learn about the loan amount and loan terms you may qualify for.
Federal Student Loans for Graduate Students
If you intend to enroll in a graduate school program, you may be wondering what your loan options are when you have low credit scores. Both parents and students can apply for federal student loans for graduate school expenses. Credit scores are reviewed for these loans. However, if you have bad credit scores, you may still be approved as long as you do not have negative marks on your credit report. For example, some people have lower credit scores because they have too much debt. However, they may not have any late payments or other derogatory credit items on their credit reports. The FAFSA form is used to apply for these loans as well.
Private Student Loans From Banks and Other Lenders
In some cases, individuals do not qualify for enough federal student loan money to fully cover the cost of their education, and they are looking for an alternative financing source. In other cases, they do not qualify for federal student loans at all. If either one of these scenarios applies to you, the good news is that you can still apply for private student loans. Banks and other lenders typically will review your credit report when you apply for private student loans, but some may be more lenient regarding credit scores than others. Keep in mind that these loan programs are often score-driven. This means that your interest rate may be higher if you have bad credit scores. You can, however, obtain the loans you need today, and you can always refinance your loans to obtain a lower rate in the future when your credit rating improves.
Options to Keep Student Loans as Low as Possible
Many people strive to keep student loan debt as low as possible. Others may not qualify for the full amount of student loan funding they need, and they may be looking for different ways to pay for their college education. Whether you want to keep loan amounts low or you have been issued a lower loan amount than you need, there are a few strategies you can consider using to get through college. For example, you can look for grants and scholarships to pay for some of your education costs. You can also take a lighter course load each semester and get a part-time job. This can help you to pay for some of your expenses out of your own pocket.
While it may take longer to get through school with this approach, you can nonetheless find a way to pay for your education. There are other ideas as well, such as taking some courses at a more affordable community college or using CLEP exams to earn more affordable credit. While paying for your college education can seem challenging, many students are able to piece together a funding strategy through various sources. The first step to take is to apply for a federal student loan today. If you determine that you need additional funding, you can keep private loans and additional funding options in mind.