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Having bad credit isn’t the best predicament to be in, but luckily there are programs and loans available that can help:
Find out which option is right for you and your credit.
Federal student loans
Your first and best option for bad credit is to look into federal student loans. When you fill out the FAFSA to apply for financial aid, you can receive many different types of aid. This includes grants, scholarships, work-study opportunities, and student loans. The different types of student loans may include:
- Direct Subsidized Loans: These are available if you showcase financial need. In your financial aid award letter, you’ll know your expected family contribution. A Direct Subsidized Loan is when the government covers interest costs while you’re in school. Credit checks aren’t required for this type of loan, and you can receive on without having an established credit history.
- Direct Unsubsidized Loans: These are available for undergraduate, graduate, and professional students and aren’t based on need. Anyone who needs a federal loan that doesn’t qualify for a subsidized one can get an unsubsidized one. But an unsubsidized loan is when you’re responsible for interest costs while you’re in school. A credit check or an established credit history isn’t required for this type of loan.
- Direct PLUS Loans: These types of loans are for graduate and professional students or parents of dependent undergraduate students. You can get this type of loan without demonstrating financial need, but a credit check is required. If your parent is taking out a loan to help you pay for school, their credit will be checked, not yours.
- Direct Consolidation Loans: These are available after you’ve graduated or dropped below half-time enrollment. If you have many different federal loans, you can consolidate them into one manageable payment. Consolidation loans are usually taken out after you’ve graduated with many federal loans.
Though not always, federal loans typically have lower interest rates compared to private student loans. So keep that in mind as you figure out what works best for you.
Private student loans
If you’ve exhausted all your federal student loan options and you still need money to pay for school, private student loans can be a good option, too.
Many different financial institutions offer private student loans, including:
- Banks
- Credit unions
- Online lenders
While most federal student loans don’t require a credit check, private student loans do require one. Credible lets you compare private loans from multiple lenders without affecting your credit. So you can decide whether or not the lender or loan is right for you before a hard credit pull.
Then if you decide to move forward with an offer and complete an application, the lender will take your credit score, income, and employment into consideration.
Private student loans with a cosigner
If you don’t have strong enough credit to qualify on your own, many private student loan lenders allow you to use a cosigner. A cosigner signs onto the loan with you and agrees to pay back your loan if you can’t. In fact, over 90% of private student loans are cosigned.
Having a cosigner can help you qualify for a lower rate than you could on your own, so it’s worth considering. Be mindful that the lower your credit score, the higher your interest rate. Even if you qualify for a private student loan with bad credit, you won’t have the lowest interest rate available. This could impact your monthly payments as well as your total repayment amount. So this could be a good reason to use a cosigner.
8 of the best private student loans for bad credit
Some of the best private student loans allow you to qualify with or without a cosigner, and Credible makes it easy to compare the lenders below without impacting your credit. You can even compare different cosigners to see which one would get your the best rate.
The student loan companies in the table below are Credible’s approved partner lenders. We have not included other lenders.
| Lender | Fixed Rates From (APR) | Variable Rates From (APR) | Get Rates Through Credible |
|---|---|---|---|
 | 5.88%+ | 5.20%+ | Get Rates Ascent review |
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 | 4.40%+1 | 1.95%+1 | Get Rates Citizens Bank review |
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 | 4.31%+2,3 | 2.69%+2,3 | Get Rates College Ave review |
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 | 4.52%+8 | 3.01%+8 | Get Rates EDvestinU review |
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 | 4.09%+ | 2.77%+ | Get Rates INvested review |
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 | 3.95%+ | N/A | Get Rates INvested review |
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 | 4.74% - 11.85%9 | 2.00% - 10.01%9 | Get Rates Sallie Mae review |
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your credit score. 100% free! |
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Lowest APRs reflect autopay, loyalty, and interest-only repayment discounts where available | 1Citizens Bank Disclosures | 2,3College Ave Disclosures | 6Discover Disclosures | 8EDvestinU Disclosures | 9Sallie Mae Disclosures |
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Citizens Bank Student Loan Rate Disclosure Variable rate, based on the one-month London Interbank Offered Rate ("LIBOR") published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of April 1, 2020, the one-month LIBOR rate is 0.92%. Variable interest rates range from 1.95%-10.28% (1.95%-10.13% APR) and will fluctuate over the term of the loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a co-signer. Fixed interest rates range from 4.40%-12.19% (4.40% - 12.04% APR) based on applicable terms, level of degree earned and presence of a co-signer. Lowest rates shown requires application with a co- signer, are for eligible applicants, require a 5-year repayment term, borrower making scheduled payments while in school and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change. Please note: Due to federal regulations, Citizens Bank is required to provide every potential borrower with disclosure information before they apply for a private student loan. The borrower will be presented with an Application Disclosure and an Approval Disclosure within the application process before they accept the terms and conditions of the loan. |
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You can also work to improve your credit
If you’re in need of student loans with bad credit, but have exhausted all your options above, don’t worry. There are many things you can do to improve your credit score so you can qualify for student loans in the future:
- If you have debt, pay it off. Start lowering your credit utilization and increasing your positive payment history by paying off your debt. Even minimum payments made on time every month can increase your score in a few months.
- Become an authorized user. Rather than attempt to take out credit on your own, ask a parent or other relative with great credit if you can become an authorized user on one of their credit cards. You don’t have to use the credit card but your score will go up from their strong creditworthiness.
- Report your other expenses to credit bureaus. You can use things like Experian Boost to get your utility bills and phone bill on your credit report. These don’t require a credit check and can show you’re responsible with credit.
Methodology: Credible evaluated loan and lender data points in 10 categories to identify the “best companies” for private student loans. We looked at interest rates, repayment terms, repayment options, fees, discounts, and eligibility. We also considered each company’s level of customer service provided, cosigner release options, whether the minimum credit score is available publicly, and whether consumers could request rates with a soft credit check. Credible receives compensation from its lender partners when a user of the Credible platform closes a loan with the lender.
