Bad Credit Government Student Loans - The Facts

Bad Credit Government Student Loans - The Facts


Let"s face it; if you"re a student with bad credit, you"re not alone. In fact, most students applying for student loans have less than stellar credit. Fortunately, many banks and financial institutions offer loans for college students with bad credit. The federal government also offers loans for students, regardless of their credit rating. Here are some tips that may help if you"re student looking for additional funds for your college education:
* If you haven"t already done so, visit the FAFSA website and apply for federal grants. Of course, you may not qualify for federal grants, however the application process is easy and definitely worth it if you are awarded funds.
* Visit your financial aid department and apply for government loans. These loans, such as the Stafford or Perkins loan, offer you credit via the federal government regardless of your credit rating. Loan amounts vary from 00 to 00 for each school year, and the government pays interest while you are attending school.
* Bad credit government student loans don"t necessarily exist. Stafford and Perkins loans are awarded on an "as needed" basis, and do not require a credit check. If an organization boasts that it offers federally backed student loans, but requires a credit check, then it probably isn"t a federally backed loan.
* Non-Federal backed loans are often called private or alternative loans. These loans are not back by the government, and the borrower will pay interest while attending school (unsubsidized). However, these loans often have a higher credit limit, and offer low interest rates. If you have bad credit, you have the option of finding a co-signer with good credit to attain the lower interest rate.
* If you (the student) have bad credit, you may qualify for a PLUS (Parent Loan for Undergraduate Students) student loan. These loans are federally backed, and allow your parents to finance your education. These loans are not "need based" and required the parents to meet the minimum credit requirements. Other requirements are that the student of the parents be enrolled at least part-time in an accredited 2-year or 4-year college.
* Government student loans not only have the added advantage of lower interest and "no credit check", they are also much easier to consolidate once the student has graduated. Due to less appealing terms and higher interest rates, always apply for federally backed loans before considering a private or alternative loan.
Before applying for any loan, government or private, read the terms and conditions before signing the dotted line. Don"t get scammed into signing into high interest loans that can be impossible to pay off in a reasonable amount of time - as there are always lower interest alternatives. Manage your debt wisely and be a responsible borrower.