Student Loans for Bad Credit

When the time comes to begin college, bad credit is something that you don't want to get in your way. Fortunately, it need not be a problem. Even with credit problems, you will still have access to a number of loans at rates that are reasonable and affordable.

If you need a student education loan, but have less than perfect credit, this article provides information about what kind of student loans may be available to you.

Government Loans

There are a number of available college loans from the government where your credit standing is not a factor in any way. These government loans are based on the assumption that many applicants have recently graduated from high school and/or are still dependents who have not had time to build credit.

Stafford Loans

One of the most popular and widely used student loan is the Stafford loan, for which all students can apply regardless of income or need.

There are two basic kinds of Stafford loans - subsidized and unsubsidized.

The subsidized loan is based entirely on a student's need for the current school year. Students must also apply for a new loan each year to determine eligibility. One terrific feature of the subsidized loan is that the interest will be paid as long as the student is enrolled in school for a minimum number of required units.

The unsubsidized Stafford loan is available to all students - regardless of your need or income level. However, unsubsidized version of the Stafford Loan requires that the student make minimum interest payments on the current loan balance.

Federal Perkins Loan

Another government loan that does not require a student to have good credit is the Federal Perkins loan. The Federal Perkins Loan Program provides low-interest loans for students based upon need, to help finance the costs of postsecondary education.

The U.S. Department of Education, using a standard formula, determines need by evaluating the financial information reported by the student on the Free Application for Federal Student Aid (FAFSA). The Perkins loan is made available to students throughout their entire college years up to a maximum amount. It can be provide amounts up to $4,000 per year for undergraduate students and $6,000 per award year for graduate and professional students. Maximum award for Perkins Federal Loan is $20,000 for an undergraduate student and $40,000 for a graduate or professional student, including loans borrowed as an undergraduate student.

When considering government education loans, both the Stafford and Perkins loan programs should be looked at before applying for any private loans. Federal loans will generally have lower interest rates than other programs, and are offered to students regardless of financial need.

Private Loans

One private school loan worth checking out, even if you have bad credit, is the One Simple Loan (OSL) program. While OSL loans are more expensive than the Federal schools loans, they are less expensive than many standard traditional personal loans.

The Parent Loan (PLUS) program is another loan you can apply for even if you have less than perfect credit. The PLUS loan is applied for by the parents of the student, and is thus based upon the parent's credit standing not the student's credit.

In addition, there are many other private loans available to students who have bad or insufficient credit. Some loans are specific to a field of education, such as medical, education, etc., or can be obtained as personal loans. When considering any kind of loan other than a Federal student loan, it is important to look carefully at repayment terms as well as interest rates. In many cases, it will be necessary to get loans from several sources in order to complete your education.