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Best student loans for bad credit or no credit November 2022
Holly Johnson writes expert content on personal finance, credit cards, loyalty and insurance topics. In addition to writing for Bankrate and CreditCards.com, Johnson does ongoing work for clients that include CNN, Forbes Advisor, LendingTree, Time Magazine and more. Chelsea has been with Bankrate since early 2020. She is invested in helping students navigate the high costs of college and breaking down the complexities of student loans. Mark Kantrowitz is an expert on student financial aid, the FAFSA, scholarships, 529 plans, education tax benefits and student loans. Bankrate logo The Bankrate promise If you're looking for a student loan with bad credit, it's best to start with federal loans, since most don't require a credit check and all come with low rates and robust borrower protections. However, you can also pursue private student loans, which offer larger loan amounts and more customizable repayment. It may also make sense to look into options like income share agreements, which don't have strict credit score requirements. How to shop for a student loan with bad credit or no credit
1 Calculate how much you need
2 Fill out the FAFSA
3 Compare rates and terms
4 Consider a co-signer
What to do if you can' t qualify for a student loan
1 Compare income share agreements
2 Apply for additional scholarships
3 Consider enrolling half time
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The Bankrate promise
Founded in 1976 as the , a print publisher for the banking industry, Bankrate has a long track record of helping people make smart financial decisions. We've maintained this reputation over four decades by prioritizing facts and experience over hype and hearsay, and quickly responding to economic trends that offer our users a more relevant experience.
Advertiser DisclosureThe listings that appear on this page are from companies from which this website receives compensation, which may impact how, where and in what order products appear. This table does not include all companies or all available products. Bankrate does not endorse or recommend any companies.Definition of terms Apply Get student loan refinance offers
Answer a few questions in two minutes or less to see which student loans you pre-qualify for. It's free and will not impact your credit score.The Bankrate scoring system evaluates lenders' affordability, availability and customer experience based on 11 data points selected by our editorial team.An annual percentage rate (APR) represents the interest and fees you'll pay on top of your initial amount every month. A fixed rate will not change during your repayment period.The range of loan amounts that a lender will service. The maximum value is the largest amount a lender will give although this amount may not be available to borrowers who don’t have good or excellent credit. Amount ranges may vary for non-loan products. Term refers to the amount of time you have to repay the loan.The minimum credit score typically required to qualify for a loan with a given lender. Exact thresholds are not always disclosed by a lender and in certain cases the minimum score is the best estimate based on publicly available information. Credit score refers to FICO 9.0 unless otherwise stated. 4.6Bankrate Score4.50- 14.83with AutoPay Term: 10-15 yr See offersArrow Right Offer DetailsLender InfoBankrate's ViewCompetitive variable and fixed interest ratesNo origination fee or prepayment penaltyInterest, $25 Fixed, or Deferred Repayment Options Apply on partner siteINCOME BASED REPAYMENTIncome-Based Repayment (IBR) is a student loan repayment program that regulates the monthly repayment amounts based on a percentage of one's gross earned income for a set period of time. IBRs are an alternative to traditional private student loans. Income Based Repayment - No Cosigner Required Get approved in minutes. Pre-qualify without affecting your credit score.See offersArrow Right Offer DetailsLender InfoBankrate's ViewNo cosigner requiredGet approved in minutesPre-qualify without affecting your credit scoreIncome-based repayment with built-in protections, like deferred payments if you lose your jobNo in-school payments. Monthly payments only begin when you land a job grossing at least $30,000 yearly.Never pay more than the maximum payment cap. Edly Student IBR Loans are unsecured personal student loans originated by FinWise Bank, a Utah chartered commercial bank, member FDIC. All loans are subject to eligibility criteria and review of creditworthiness and history. Terms and conditions apply. Loans from $5,000 - $20,000 Example: $10,000 IBR Loan with a 7% gross income payment percentage for a Senior student making $65,000 annually throughout the life of the loan. Payments deferred for the first 12 months during final year of education. After which, $270 Monthly payment for 12 months. Then $379 Monthly payment for 44 months. Followed by one final payment of $137 for a total of $20,610 paid over the life of the loan. About this example The initial payment schedule is set upon receiving final terms and upon confirmation by your school of the loan amount. You may repay this loan at any time by paying an effective APR of 23%. The maximum amount you will pay is $22,500 (not including Late Fees and Returned Check Fees, if any). The maximum number of regularly scheduled payments you will make is 60. You will not pay more than 23% APR. No payment is required if your gross earned income is below $30,000 annually or if you lose your job and cannot find employment. Apply on partner site4.5Bankrate Score4.12- 15.75$3k- $20kTerm: 5-20 yr See offersArrow Right Offer DetailsLender InfoBankrate's ViewNo cosigner required, ever.Up to $15,000 per academic yearNo origination fees. No application fees. No late payment fees. No prepayment penalties.0.5% autopay discountCheck rate without impacting your creditEarn rewards through our Borrower Referral Program Close X The Bankrate guide to choosing the right student loan with bad or no credit
Why trust Bankrate? At Bankrate, our mission is to empower you to make smarter financial decisions. We've been comparing and surveying financial institutions for more than 40 years to help you find the right products for your situation. Our award-winning editorial team follows strict guidelines to ensure the content is not influenced by advertisers. Additionally, our content is thoroughly reported and vigorously edited to ensure accuracy. LENDER CURRENT APR RANGE LOAN TERMS MIN. LOAN AMOUNT MAX. LOAN AMOUNT BEST FOR Federal student loans 4.99% - 7.54% fixed 10 to 25 years None $7,500 annually for dependent undergraduates, $12,500 annually for independent undergraduates and 100% total cost of attendance for graduate students Overall student loans 3.39% - 13.65% variable (with autopay); 4.12% - 15.75% fixed (with autopay) 5 to 15 years $2,001 $200,000 Academic achievers 7.49% - 12.99% fixed (with autopay) 10 years $3,001 $20,000 Undergraduate borrowers Check rate with Bankrate Min. credit score: None Fixed APR From: 3.73% –6.28% Loan amount: $1,000– $500,000 Term lengths: 10 to 10 years Min. annual income: $0 Pros & Cons
Pros
Federal deferment and forbearance options. Access to income-driven repayment plans and loan forgiveness. No minimum credit score requirement. Cons
Origination fees for all loans. Rates may be higher than private lenders' lowest advertised rates. Eligibility & More
Check rate with Bankrate Min. credit score: Not disclosed Fixed APR From: 4.12% –15.75% Loan amount: $3,000– $20,000 Term lengths: 5 to 20 years Min. annual income: $0 Pros & Cons
Pros
Cash back reward upon graduation. Autopay discount of up to 1 percent. Outcomes-based loan option. Cons
Loan amount cap of $200,000. High interest rates for outcomes-based loans. Undisclosed credit requirements. Eligibility & More
Check rate with Bankrate Min. credit score: Not disclosed Fixed APR From: Not disclosed Loan amount: $3,000– $20,000 Term lengths: 0 to 0 years Min. annual income: $0 Pros & Cons
Pros
Co-signers not required or accepted. Lending decisions based on academics. $100 gift card upon graduation. Cons
High starting interest rates. Relatively low annual loan amounts. Available to residents of only 38 states. Eligibility & More
Fees: Funding U does not charge any fees. Student loan alternatives for borrowers with bad credit
For some borrowers, the high interest rates and strict approval guidelines associated with bad-credit student loans may not be worth it. In this case, borrowers may turn to income share agreements. give you money for school, then accept a percentage of your monthly income as payment. When you sign up for an income share agreement, you'll receive terms including: The percentage of your income you'll owe. The minimum and maximum amount you'll be required to pay monthly. The length of time for which you'll need to make payments. Income share agreements can benefit borrowers with bad credit since many lack student loans' strict credit score requirements, and you won't be subject to high interest rates. But remember that your income share agreement payments will change alongside your income. If you end up in a high-paying job, you may pay back more than what you borrowed through your ISA. Still, the risk could be worth it if you're having trouble getting approved for other types of funding. Edly Best income share agreement for quick funding
Why Edly is the best income share agreement for quick funding: Edly advertises the fact that it has a quick application and approval process. According to the company, borrowers can check their terms within 30 seconds and complete the application within two minutes. Pros: Three-minute application. . No minimum credit score. Cons: Does not disclose payment structure. Relatively low loan maximum of $25,000. Few direct customer service options. Eligibility & More: Edly doesn't disclose many of its eligibility requirements; it says only that it will check your school and major. While there are no minimum credit score requirements, Edly will also check for any adverse credit history. Borrowers with late payments or collections in their credit history may have a harder time being approved. Stride Funding Best income share agreement for career resources
Why Stride is the best income share agreement for career resources: In addition to the basic perks of an income share agreement, Stride goes a step further by providing career resources and perks to its members, even after graduation. These include networking events, skill workshops and exclusive discounts. Pros: Robust online resources. Clear eligibility criteria. Maximum repayment period of 10 years. Cons: Does not disclose income share percentage. Relatively short grace period of three months after graduation. Funding limited to $25,000 per year. Eligibility & More: Stride evaluates your future ability to repay the loan. It does not have a minimum credit score but may not approve borrowers with an adverse credit history, such as a history of default or collections. Borrowers must be U.S. citizens or permanent residents attending a Title IV college or university at least half time. They must be within two years of graduation. Associate degrees are not eligible. Stride also requires a GPA of at least 2.9. Stride income share agreements are available to borrowers in all states except Alabama, Colorado, Iowa, South Carolina and Washington. Can you get a student loan with bad credit
It is possible to get a student loan even if you have bad credit or no credit history. That said, it will be more difficult to qualify, and rates will be higher. Federal student loans are the easiest to qualify for. Most won't do a credit check and don't consider your credit score. Plus, interest rates are the same for all borrowers. Federal vs private student loans
Borrowers with poor credit can choose between federal and private student loans. The U.S. Department of Education offers federal student loans and sets one fixed rate for all borrowers. They also don't have a minimum credit score requirement, so they're the first place to turn if you have a spotty credit history. Note that through , borrowers with federal student loans are not required to make payments and interest charges are waived. On Jan. 1, 2023, interest accrual will resume and so will borrowers' responsibility for making payments. Banks, credit unions and online lenders offer private student loans. Unlike some federal student loans, they often allow you to borrow up to the total cost of attendance at your school. However, you won't have the benefit of income-driven repayment plans or loan forgiveness programs. Private student loans offer a wider range of interest rates based on your credit score. Here are some of the key differences between federal and private student loans: PRIVATE STUDENT LOANS FEDERAL STUDENT LOANS Maximum loan amount Depends on lender (may be up to 100% total cost of attendance) $7,500 annually for dependent undergraduates, $12,500 annually for independent undergraduates and 100% total cost of attendance for graduates Interest rates 2% to 15%; may be fixed or variable 4.99% to 7.54% fixed for 2022-23 Fees Varies by lender; often no fees Origination fee of 1.057% to 4.228% Benefits High loan limits, low interest rates, the choice between fixed and variable rates Access to income-driven repayment plans, long deferments and forbearances, no credit check required for most loans Drawbacks High rates for bad credit, limited forbearance options, no federal benefits Lower loan limits, limited repayment terms Qualification requirements Depends on lender; often requires good credit or a creditworthy co-signer Meet What to know about the FAFSA
Borrowers who are interested in taking out federal student loans must every year. This form asks for information about your finances and your family's finances, but completing it won't affect your credit. For each FAFSA cycle, the application opens on Oct. 1 prior to the award year and of the award year. For 2023-24, the FAFSA opens on Oct. 1, 2022, and closes on June 30, 2024. However, deadlines vary by state and college. In some circumstances, you can after submitting the application. Applying for a student loan with a co-signer
A co-signer is a creditworthy friend or family member who takes on the responsibility of the loan with the borrower. Their creditworthiness can make it easier for the primary borrower to get approved for the loan and qualify for lower interest rates. The downside is that the for paying the loan if the primary borrower misses payments. Delinquency could affect the co-signer's credit score. Can I get a student loan without a co-signer if I have bad or no credit
If you don't have a co-signer, your best bet at finding funding is federal student loans. Most don't require a credit check. The one exception is Direct PLUS Loans, which look for an adverse credit history but don't set a minimum credit score. With private student loans, whether or not you can get approved without a co-signer depends on the lender. Some have more flexible eligibility requirements, while others offer loans designed for borrowers without co-signers. These unique loans may use your academic performance or future earning potential to determine your eligibility and rates. How to improve your credit score for a student loan
If or you have some time before you need to apply for a student loan, it's worth figuring out some ways to : Pay all of your bills early or on time. Your payment history is the most important factor in determining your . Late payments are detrimental to your credit health, but making on-time or early payments on all of your bills can boost your credit score over time. Pay down other types of debt. The more debt you pay off, the lower your credit utilization, which makes up 30 percent of your FICO Score. If you have several types of debt, focus on high-interest debt and unsecured debt like credit cards first. Get a new credit account. If you don't have any credit history, sign up for a . If you use your credit card to make small purchases and pay it off each month, you'll build positive credit habits and your credit history at the same time. Pay off accounts in default or collections. Consider paying off any late accounts prior to applying for a student loan. Collections accounts stay on your credit report for seven years, which could drastically reduce your chances of being approved for financing. Dispute credit report errors. Mistakes can happen, which is why it's smart to regularly check your credit reports and dispute any errors that could be negatively affecting your credit score. You can check your credit reports for free at . Student loan options for parents with bad credit
Parents with poor credit still have options to help finance their child's undergraduate or graduate degree. Parents should start with a federal parent PLUS loan, which comes with some federal benefits and can cover up to the total cost of a child's education. Eligibility requirements for a parent PLUS loan are , so parents with bad credit can still get approved. However, adverse credit history like defaults, foreclosure or bankruptcy will make it harder to qualify. Parents with adverse credit history may add an endorser to the loan, who essentially serves as a co-signer. Parents can also look into private student loans. Many lenders have student loans designed for parents. These loans may cover up to the full cost of a child's education and feature flexible repayment options. However, most private lenders have a minimum credit score requirement. If you go this route, look for lenders that accept borrowers with poor credit or take other factors into account. Parents can also apply for a loan with a creditworthy co-signer if they have bad credit or if their initial application is denied.
Methodology
The best student loans for bad credit or no credit are accessible to many borrowers and feature reasonable interest rates. To select lenders, we first sought out lenders that are available across the United States and which feature a range of loan amounts and repayment options. To narrow down the field, we then examined lender fees, APR ranges and eligibility requirements to see which lenders kept costs as low as possible for bad-credit borrowers. Lenders were then ranked based on unique features that appeal to a specific group of borrowers - for instance, borrowers applying for a loan without a co-signer or those seeking flexible repayment terms. We also looked into income share agreements, which can be a better option than student loans for borrowers who have no credit and no co-signer. The income share agreements featured on this page have flexibile eligibility requirements and low rates.