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A student loan can be a great tool to pay for an undergraduate degree or graduate program, it might also come with a credit check. But there are also no credit check student loans available, too.
Here’s a look at which student loans require a credit check (and other options if your credit is less than stellar):
- The only loans available without a credit check are federal loans
- Most private student loan lenders require a credit check
- Have bad credit or no credit? Time to get a cosigner
The only loans available without a credit check are federal loans
Federal student loans are the only student loans that don’t come with a credit check. These loans are backed by the U.S. government, and you can apply for them by filling out the Free Application for Federal Student Aid (FAFSA).
Here are the types of federal student loans that don’t require a credit check:
- Direct subsidized loans: Subsidized loans are available to undergraduate students with financial need. With these loans, the government covers Interest charges while you’re in school. After you graduate, interest rates are kept low by the government.
- Direct unsubsidized loans: Unsubsidized loans are available to both undergraduate and graduate students, and they don’t take financial need into account. Unlike subsidized loans, unsubsidized loans start charging interest right away. But they can still be a good deal if you need to borrow for school.
Subsidized and unsubsidized federal loans don’t require a credit check. Instead, your school’s financial aid office will offer you a financial aid package based on your FAFSA results.
While you don’t need a credit score to qualify for most federal student loans, there are other important requirements to be aware of. Here’s what you need to qualify for federal student loans:
- A valid Social Security number
- Selective Service registration (male students ages 18 to 25)
- Eligible citizenship or legal residency status
- High school diploma, GED, or equivalent
- Enrollment in an eligible accredited college, university, or trade school program
- Signed and completed FAFSA
- Satisfactory academic progress (meet school GPA requirements)
- In good standing with existing loans
PLUS loans are another kind of federal loan available to graduate students and parents. Unlike subsidized and unsubsidized loans, PLUS loans require a credit check. Keep in mind that, if you have excellent credit, PLUS loans could be more expensive than private student loans.
Lastly, remember to look into free financial aid, such as scholarships and college grants. Unlike student loans, you don’t have to pay these types of aid back.
Learn More: 8 of the Best Student Loans for Bad Credit
Most private student loan lenders require a credit check
While most federal student loans don’t require a credit check, private student loan lenders will review your credit before issuing a new loan. Here’s a brief look at how your credit is used to approve a private student loan:
- Getting your loan rate: You can usually check your rate by filling out a short form that allows the lender to take a quick look at your credit, as well as other factors. This typically involves a soft credit check, which won’t impact your credit score.
- Full underwriting: If you like the rate and terms you get from filling out the short application, you can submit a full application. The lender will then look at your credit, income, and ability to repay to make a final decision.
It’s a good idea to consider as many lenders as possible to find the right loan for you. With Credible, you can easily check your rates with multiple lenders by filling out a single form. Plus, there’s no hard credit check involved when you check rates, meaning your credit score won’t be impacted. Once you decide to move forward with a lender and apply for credit, the lender will conduct a hard credit check and this does have an impact on your credit score.
Have bad credit or no credit? Time to get a cosigner
If federal loans, grants, and scholarships aren’t enough to fully cover your education costs, private loans could help fill the gap. Even if you have bad credit or no credit, you might still qualify for a private student loan with a creditworthy cosigner.
Whatever you decide, remember to compare as many private student loan lenders as possible so you end up with the right loan for your situation. You can see your rates with multiple lenders in as little as three minutes by using Credible — including loans with and without a cosigner.