Last Updated on Jun 25, 2021 by James W
Imagine you’ve lost your job and can’t find a new one. You want to go back to college, brush up on new skills, and maybe even change careers entirely. But here’s where mistakes from the past can come back to haunt you. Is it possible to get student loans for people with bad credit? This is a serious problem, especially when you add the fact that tuition rates are skyrocketing. But you can get a student loan, even if you have bad credit, by following the instructions in this article.
Look into Grants and Scholarships First
Obviously, the first thing to do is check out scholarships and grants. Every year, some funds go begging because students don’t apply for them. You probably know about the big ones, such as Pell Grants, offered by the federal government. These are quite competitive. But look for loans and grants based on your specific situation; for instance, scholarships for high academic performance, for athletes, for those who have a history of volunteerism. Some scholarships and grants are based on need alone. Check with your individual college office for more information. Ask about scholarships funded by alumni with special criteria – for instance, that you come from a specific city or plan to go into a specific field.
Apply for Low-Cost Federal Loans
When it comes to student loans for people with bad credit, a good option is low-cost federal loans. When you apply to college, you’ll be given the opportunity to fill out a financial aid application (learn more about financial aid here). This Free Application for Federal Student Aid, (FAFSA), allows you to request eligibility for low-cost federal loan programs. Once you complete the FAFSA, you’ll be automatically notified about loans you’re qualified for. One federal program, the Stafford Loan, has a fixed interest rate. And you don’t have to repay this loan until six months after you graduate or leave college, which gives you time to find a job. Stafford Loans don’t accumulate interest until you complete college. Stafford loans are available to all students, but not all federal loans provide subsidized interest. Other low cost government loans include Perkins Loans and PLUS loans, which are given based on economic need, and provide low, fixed-rate interest charges. If you opt for the latter, consider refinancing PLUS loan options that allow you to pay off your loans quickly, free up more room in your monthly budget, and simplify your finances.
Can you get a Federal Loan with a Low Credit Score?
Absolutely. Bad credit student loans and general bad credit personal loans are available from federal lenders because they don’t even check your credit score. Why? Because the federal government insures the loans, thereby minimizing loss to the lenders. And, since you can’t discharge student loans with bankruptcy, you’ll be obligated to repay them.
Available Private Loans
Even if you receive federal student loan funds, they may not be enough to cover college. Remember the rising costs of everything from tuition to food and lodging will affect your ability to get by until you get out of school. You can make up the difference with bad credit student loans from private lenders. But this is a case of “buyer beware.??? Student loans for borrowers with bad credit tend to have higher interest rates, so you need to shop around and find the best deal you can. If you need to go back to school to find a new career, you have many options for student loans, even if you have bad credit. Just be careful how you deal with your finances so you don’t make a bad situation worse. Be frugal with your funds and you’ll find that you can turn your future around.
