iBest Student Loans

Few things are as difficult as borrowing for school; the FASFA is multiple pages of difficult document-hunting; student loan lenders are picky for borrowers; and it’s hard to keep a job that pays enough to pay for school with cash.

Unfortunately, many other college students also find that their credit scores affect their chances of borrowing, as well. Student loan lenders are known to reject applications based on credit scores, and there are only a limited number of things you can do to borrow student loan cash with bad credit.

Government First
The US Government’s Direct Loans program is any student’s best shot at borrowing money with bad credit. Through Direct Loans, students can borrow up to $27,000 over the course of four years with Stafford Loans. Students who are not considered a dependent, but instead an independent, can borrow as much as $32,500 through the program.

Borrowing with Stafford Loans is one of the best deals you can get. Not only are you guaranteed acceptance as long as you keep up class participation minimums, you’re also guaranteed to receive a loan at a very low rate. Plus, Stafford Loans from Direct Loans do not require credit approval, and the Department of Education does not pull your credit score to determine whether or not they will accept you. As long as you show up for class and get decent grades, you’re guaranteed to receive the award they offer to your each year.

Private Borrowing
Private student loan lenders are a great place to start looking after your Government loans have been maxed out. Private borrowers will usually lend to you the difference between the cost of attendance and your government loans or aid. As an example, if you have $15,000 in cost of attendance and $5,500 in Stafford Loan awards, then the private lenders will offer as much as $9,500 in loans.

In general, getting a student loan with bad credit isn’t as hard as getting another type of loan with bad credit. Student loan lenders are more interested in your earnings than your bad credit, since the law says that you are legally required to pay back borrowed student loan money regardless of your fiscal condition. That is to say that no bankruptcy or any financial problem will ever relieve you of the debts you owe to lenders. The government can, and will, garnish your wages to pay back lenders, if necessary.

That scary thought aside, know that most student loans are amortized over so many years that they’re hardly a drop in the bucket. A $10,000 loan amortized over 20 years, for example, would cost less than $70 per month. That won’t break your personal bank account by any means.

Here’s what you need to know:
1. Borrowing privately with bad credit isn’t impossible, but it will cost you in the form of paying higher interest rates.

2. Income is more important than credit score, and if you can demonstrate that you can hold down a job, then you’re far more likely to get a loan than someone with good credit and bad employment history.

3. Cosigners are the easiest way to get a loan. By cosigning, someone else agrees to pay the loan should you be unable to make monthly payments. Getting a cosigner with good credit will guarantee acceptance, but will also put another person on the hook for a loan.

4. Private loans are more expensive and harder to get than loans from the Government’s Direct Loans program. Always seek out a loan from the government first, not last.

5. The less you borrow the better shot you have of getting a loan. Do not borrow for items that aren’t 100% necessary, and always have a plan to repay the lender. A great way to show a lender that you mean business is to seek a loan for less than the tuition cost, which will imply that you’re putting your own money in your education.

Don’t let bad credit get in the way of a proper education. Bad credit student loans are available, but they aren’t so easily gotten. Start looking now, before everyone else does.