No Credit Student Loans

The most important part of applying for a student loan is to take the time needed to research and get the best deal possible for your individual needs, especially if you are looking for a non credit based student loan.  Many student loans can be applied for online.  If you get a negative response or very poor terms, keep looking.  You must expect to pay higher interest rates, but you need to compare rates offered to still get the best deal.  Don’t give up after one or two responses.

If you skip payments, make late payments, declare bankruptcy or exceed your credit card limits, you reward yourself with bad credit.  Yes, there are companies that work with people who have bad credit, but you are definitely in an uphill battle.  You will also pay a greater price with higher interest rates until you can establish a good credit record again.  In reality, obtaining a bad credit student loan and responsibly paying it off can establish good credit.

If you have bad credit or do not have a co-signer, the best time to start getting information for student loans for your situation is during your junior year in high school.  You need to plan out your loan just as you would if you had good credit.  Determine the total amount you will need and factor in any scholarships or grants that are available.  Contact the colleges you are interested in attending.  Discuss your situation with a financial aid officer.  Let them know of your bad credit situation and keep pressing for alternatives.  They should have alternatives for you.

PLUS loans are Parent Loans for Undergraduate Students.  In the past, they were only available to parents, but now they are an option for graduate students as well.  Parents are responsible for repayment of the loan.  These are really best used to supplement federal loans, grants and scholarships as their interest rates are usually higher. 

A co-signer on a student loan is simply stating that they will payback a loan if the student does not.  A co-signer usually comes into play when the primary borrower does not have a credit history or has poor credit.  Normally, it is a parent who co-signs.