A lot of students may not think they can obtain a student loan due to a bad credit score or a bad credit history and many give up on their college dreams. However this should not be a factor because even with bad credit a student can still receive a student loan.
There are credit counselors as well as financial advisors that can help students with bad credit and there is usually a good chance of securing bad credit student loans despite all the negative credit history. A credit counselor can provide easy solutions for students with various debt problems and many also provide their services for free. A student can go through credit counseling if the student is denied a student loan due to bad credit to get the student easy and fast approval for a private student loan.
For students seeking financial assistance immediately, there are many different loan programs that a student can check out, such as Sallie Mae or lenders like Wells Fargo.
The Sallie Mae loan program was first introduced in 1972 and is a government sponsored firm that enhances the public access to obtain a higher education by serving as a warehouse for many different student loan options.
Sallie Mae provides financial aid services specifically for students with searching for a suitable student loan that fits the student’s needs, debt management, and any settlement issues the student may have.
The Sallie Mae loan program is one of the most popular student loan programs available for students with bad credit problems today. With over 30 years of experience in the field of student loans, college loans, and consolidation loans, they have since become a top lender for many students even without credit problems.
One of the best benefits the Sallie Mae loan programs offer is their amazing low interest rates. In turn this gives students the ability to save a considerable amount of money by consolidating their student loans efficiently.
Wells Fargo also is one of the largest banks in the U.S. Wells Fargo provides many services to their customers such as student loans. They also provide a consolidation program for student loans making it easy with low interest rates for students to be able to pay their monthly installments.
Wells Fargo is a private lender for student loans so this means that they do not deal with federal student loans. Instead, Wells Fargo provides a supply of student loans out of their bank and only their bank.
Wells Fargo does look at your credit history but shouldn’t steer you from the program because they are also one of the top banks that allow students to have a co-signer, making it easier for students to acquire a substantial student loan amount.
The only drawback to obtaining bad credit student loans through Wells Fargo is that they do however still have a higher interest rate than most of the other student loan lenders.
There are also many different private lending institutions that have the right educational loan programs that are specifically designed for students with bad credit.
Many students can easily obtain a student loan by using a co-signer. Lenders are always more prone to dealing with students with a co-signer with a good credit history. In a lot of cases, students that have parents with a good credit record can act as co-signers. Interest rates on student loans may vary depending on the credit score of the co-signer.
There are also federal loan programs such as the Perkins and Stafford loans, as well as federal scholarships and grants. Most of the federal programs don’t consider the students credit history which makes a big plus in approval with students with bad credit scores.
The Stafford Loan is a federal loan provided to students by the government. This program is available for students who wish to study at least part time in college. This is a very popular loan that is a fixed loan with very low interest rates. A student can borrow up to $20,000 per school year. Students can borrow this loan directly from The Department of Education through the school or college that the student will be attending.
The only way a student can apply for a Stafford Loan is by filling out a FAFSA (Free Application for Federal Student Aid) and is sent to whatever educational institute of your choice. Once the application is reviewed the school then decided the financial eligibility for the student.
You also have the option to have a subsidized or unsubsidized loan. A Subsidized loan is when the government pays the accrued interest while the student is in school. An unsubsidized loan is when the accrued interest will be included in the student’s loan balance.
There are a few con’s to using the Stafford loan program such as they do not perform credit checks because the federal government guarantees the loan so a credit check is not required. The Stafford loan also provides the student with a fixed interest rate that is presumably the lowest interest rates on the market.
Stafford Loans also provide an easy and flexible repayment plan. This means that the student will set the payment plan that best fits the student and the student can also consolidate their loans into a single loan as well as a more affordable one. Another advantage to obtaining a Stafford loan is during the student enrollment the repayment is deferred.
There are however cons to obtaining a Stafford loan such as the student has to ask for Stafford loans every year the student is enrolled in college and in this time this leads to multiple payments and loans that will affect the student’s post-graduation life. Also, you will only direct the use of the funds because they are processed and collected only by the school for your books, tuition, and other student fees. Sometimes the loan limits are insufficient especially considering today’s post –secondary education costs.
However, the Stafford Loan is proved to be one of the most popular and most used loan programs that are available by the government for students with a bad credit history due to the loan program not requiring a credit check.
The Perkins loan is a federal loan also that gives students who seek a financial need for attending a post secondary education program. The loan amount is determined upon the individual’s need and a standard formula is used by the financial aid office and follows to disburse the amount directly to the student’s institution where the student is enrolled. These types of government loans are provided to students on a first come first serve basis.
Like Stafford loans, Perkins loans are only available to the student once the student has filled out and successfully submitted a FAFSA. Students will then receive an EFC score from the Department of Education that determines the student’s eligibility to receive federal financial aid. For low income students that are not able to pay anything will have a score of 0, while a student that is able to pay for college expenses will have an EFC score of 3,000. The lower the EFC score the student has the better chance a student has in receiving a Perkins loan.
Because the student’s college is the lender of the loan, all payment disbursements will be made out to the college. However, the lending process is very simple. The federal government will first distribute federal funds to the participating colleges, who will then lend the funds to the attending student. When the student has completed their program or course of study and is no longer enrolled then the student will make all the repayments back to their college, who in turn will then send the borrowed funds back to the federal government.
Advantages to receiving a Perkins loan include a very competitive interest rate and an easy option for students to repay their bad credit student loans. A student is given multiple repayment plans that will suite the student’s best needs.
Like a Stafford Loan, the Perkins loan is a federal government granted loan so no credit checks are required making it easier for students with bad credit scores to obtain this loan for their college education.
There is also a Federal Plus Loan available for parents who wish to educates their children attending college. This program allows parents who have a good credit rating help finance their son’s or daughter’s college expenses. The money can be used for tuition, books, housing, and other school supplies that are needed by the student. The procedure to obtain the Federal Plus Loan is pretty much the same as the Stafford and Perkins loans. In this program EFC is also looked into so that the financial aid office can come to the exact amount to be disbursed to the student.
Federal funding is a great choice for a student with bad credit because they are specifically designed to help make college more accessible for those who want to attend college but don’t necessarily have the credit to obtain a personal student loan. Federal loan programs are easier to obtain due to the easier requirements needed to obtain the federal loan. However, is the student is not able to obtain a federal loan through the US Department of Education then the student may need to turn to a private student loan. If the student is planning to graduate in a field with high earnings potential, such as law or medicine, then the student might have a better chance of receiving a bad credit student loan from private lenders.
Federal and personal student loans are available for students with bad credit and gives the student a chance at a higher education regardless of credit history. There are many other loan options that students can partake in if they have a bad credit score. Research your options and stick with the option that best fits the student’s financial and educational needs. With loans available like these it makes it easier for student’s to fulfill their dreams of obtaining a higher education e regardless of their credit score.