There is a slightly romantic view of college ingrained in the minds of those who have never been thanks to TV and movies. They tend to believe that the experience has more to do with parties and sleeping until noon rather than tutorials and hours studying in the library. Worrying about getting approval on a student loan with bad credit does not come into the picture.
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Sadly, the romantic image is quite far from the truth, though socializing is very much part of the student timetable. But the reality is that hard work and worrying over finances are both part of the college equation. For many, only by securing a student loan with bad credit can they actually pay tuition and graduate.
The trick, however, is in securing that loan in the first place, with bad credit a particular hindrance when going to traditional lenders. But there are other financing avenues to see student loan approval despite bad credit achieved, ensuring that the student can cover their tuition costs.
Choices in Student Loans
It would be a mistake to believe that the only place to get a student loan with poor credit is a bank or other traditional lending institution. The fact is there is a range of public and private lending options available to college goers, with various advantages and disadvantages.
A public lender relates to the federal government, which are involved in student loans with bad credit in order to ensure the highest possible percentage of the population attain the level in education required to get good jobs. This, after all, benefits the local and national workforce and economy.
Meanwhile, private lenders range from banks and credit unions to online lenders. The options available from these sources can vary dramatically, but student loan approval despite poor credit is more challenging too. And even when approval is secured, the interest rates can be high.
Publicly Sourced Student Loans
The simple fact to remember is that public loans are designed specifically to aid students who are in financial difficulties, making them ideal as student loans with bad credit go. They have very low rates of interest and flexible repayment schedules that usually begin only after graduation, thereby allowing the borrower to concentrate on their studies.
The principal loan options are the Perkins loan program and the Stafford loan program. The Perkins option is reserved for those students in acute financial need, but these loans with bad credit are limited in number so early application is advised. Stafford loans are available to students either subsidized, where the government pays the interest during college, or not.
With any government sponsored or subsidized loan, however, credit rating is irrelevant, so approval despite bad credit is really just a formality, if your qualification is confirmed.
Privately Sources Student Loans
When it comes to seeking privately sourced student loans with poor credit, the terms are not as good as public loans. But given that applicants need to prove a financial need, rather than simply an ability to repay, not everyone can get one. The private option, therefore, is often necessary.
Interest rates can be quite high, but some lenders offer a repayment freeze, which means the loan does not have to be repaid until after graduation. However, it is important to ascertain whether the loan approved features accumulated interest. If so, then approval despite bad credit could be a hex in disguise.
The best rates are available online, with lenders there offering better deals to attract applicants. What is more, most will also ignore the credit rating, so student loans with bad credit are more accessible. Still, read the fine print to ensure no high hidden charges.