Today many students choose student loans as funding opportunities to be able to cover education expenses (tuition, fees, books and etc.). Sometimes they have bad credit score due to previous unsuccessful loan experience. Does it mean that a borrower with bad credit score have no chance to apply for loans? The answer is no.


Bad credit student loans exist and they are real. However it’s important to understand that not all loans and lenders are open for such “bad credit” borrowers. The key is to understand that there are two types of student loans: federal and private.

Federal loans are provided by the federal government for students with financial need and for other “normal” students too. They are considered as need-based. So, their mission is not to analyze borrower’s financial situation and make a decision whether or not he will be able to repay it. Their mission is to help students who have low income. All federal loans are offered regardless of bad credit history. So, if you have a bad credit score – you can still apply and be approved. However a borrower can apply not for all federal loans. It’s necessary to know types.

There are three types of loans: Stafford, Perkins and PLUS loans. The most popular form is Federal Stafford loans. There are two subtypes: subsidized Stafford loans and unsubsidized Stafford loans.

Subsidized Stafford loans are for students with need. They are not open for “standard” students. But unsubsidized loans are not for needy students. Almost everyone can receive funding through this type of financial aid. Millions of students actually receive unsubsidized Stafford loans in spite of their credit situation every year. This is the most popular form and it’s easy to apply for it. In order to apply it’s necessary to fill out a FAFSA – Free Application for Federal Student Aid. The application process is simple and available via the Internet.

Private Student Loans with Bad Credit Score

But what if you want to apply for private student loans and have bad credit history. Is it possible to be approved? The truth is it’s not possible. Of course, you can apply for private loans but in 99% of all cases, all “bad credit” applications are denied. This is the ugly truth.

The solution is to apply with a cosigner. In this case you can be approved and receive enough funding. Remember that a cosigner is responsible for you and it’s a person you trust. Another point to consider is that cosigners must have high income and ideal credit history. Private lenders want to be sure that you will repay loans. And only if a borrower has the best cosigner – he will receive a loan. So, try to find a cosigner who will have perfect credit history and will trust you because he knows you and realizes the importance of education.

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