Can you get a student loan with bad credit?

Students discussing before class.

The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.

Even if you have bad credit, you can still get student loans. Most federal loans don’t require a credit check, which means you can borrow funds for education regardless of your credit history. Additionally, private loans may be available to you if you are able to get a cosigner or work with a lender that considers your course of study to be potentially lucrative. 

Coming up with the money to pay for higher education can be difficult, but loans—especially those based on financial need—are often helpful in providing support up front. Even if you have a low credit score or a less-than-perfect credit history, student loan options are still available to you.

Read on to learn more about how to find federal student loans or private loans with bad credit as well as tips for improving your credit if you need a higher score to secure a loan.

How to get a student loan with bad credit

Getting a student loan with bad credit means taking one of two paths: applying for federal student loans or finding a cosigner for a private student loan. 

  • Federal student loans are funded by the U.S. Department of Education, and they’re available to many people regardless of credit history.
  • Private student loans are offered by a variety of non-government financial institutions, and they’re often limited to people with higher credit scores or cosigners. 

Both of these options could work well for your situation, but it’s generally useful to apply for federal student loans first, as they tend to have more benefits and lower interest rates.

Applying for federal student loans

Federal student loans are an excellent option for many people, including those with bad credit, because they are based on financial need rather than credit scores.

How to apply for federal student loans

Before applying for federal student loans, you’ll need to make sure you meet the eligibility criteria, which include the following:

  • Demonstrate financial need (for some loans)
  • Be a U.S. citizen (or eligible as a noncitizen)
  • Be accepted or enrolled in a degree or certificate program
  • Have a valid Social Security number

These are just a few of the requirements that the government mandates for anyone looking to get federal student loans.

If you do meet the criteria, you’ll need to fill out the Free Application for Federal Student Aid (FAFSA) to determine what options are available to you.

You may be eligible for any of the following types of federal student loans:

  • Direct Subsidized Loans: These loans are available based on financial need, and they include the benefit of having the Department of Education pay interest while you’re enrolled in school.
  • Direct Unsubsidized Loans: These loans are offered regardless of financial need, and they will accrue interest even when you’re enrolled in school. 
  • Direct PLUS Loans: These loans are available to graduate students or the parents of undergraduates, and they are the only federal loans that require a credit check. 
  • Direct Consolidation Loans: These loans enable you to combine all of your federal loans into a single loan, which can reduce the complexity of your payments. 

Since the majority of federal student loans don’t require a credit check, they are an excellent option for those who have poor credit or no credit history. 

Federal student loans also offer other protections, like forbearance (in case there are periods you can’t make payments) and income-based repayment plans (which may offer loan forgiveness after a certain number of qualifying payments). Additionally, federal student loans offer fixed interest rates, which means you’ll have predictable payments for the entire life of the loan. 

Federal student loans are a good option for people with bad credit.

Federal student loans generally cover somewhere between $5,500 and $12,500 per year, although that amount can vary depending on your tax filing status and year in school. If that amount is not sufficient to cover your education costs, you may need to look into private loans.

Applying for private student loans with a cosigner

If you have bad credit, it will likely be difficult to apply for private student loans on your own. Even if you were to qualify for a loan with bad credit, it’s possible the interest rate would be so high that you’d be unable to make payments while you were studying. 

Typically, a better option if you do need a private student loan is to use a cosigner. If your cosigner has a high credit score and steady income, they’ll be able to secure better terms for the loan. That said, ensure you have a solid relationship with your cosigner, as they’ll be equally responsible for your debt if you cannot make payments.

Regardless of what kind of student loan you end up getting, working to improve your credit score can set you up for success down the road as you continue your education. 

Set yourself up for success by improving your credit score

Just as your education opens up opportunities for advancement in your career, improving your credit score can unlock better interest rates—which makes it easier to do things like get a new car or buy a house. As you work through your studies, try out some of the following tips to build your score.

  • If you don’t have any credit history, try a secured credit card. It’s hard to get a credit card without any credit, but responsible credit card usage might be a good way to build credit. One solution is a secured credit card, which works like a regular credit card but requires a cash deposit—so they don’t usually involve a credit check. 
  • Keep up with your student loan payments. If you have unsubsidized loans, you’ll accrue interest even while you’re in school, so you may want to start making payments if possible. After you graduate, look into income-based repayment plans or forbearance if you’re having trouble making monthly payments.
  • Have a strategy for paying down your debt. Especially if you need to take on other debt—like a car payment—make sure you have a solid plan for how you’ll make payments as you start out in your career after college. 

Additionally, you’ll want to take a close look at your credit report as you’re working to improve your score. If you notice any inaccurate or misleading information, it could be bringing down your score unnecessarily. In that case, you may want to work with a credit repair professional to file a dispute with the credit bureaus and have the misleading information removed. 

Reviewed by Horacio Celaya, Associate Attorney at Lexington Law Firm. Written by Lexington Law.

Horacio Celaya was born in Tucson, Arizona but eventually moved with his family to Mexicali, Baja California, Mexico. Mr. Celaya went on to graduate with Honors from the Autonomous University of Baja California Law School. Mr. Celaya is a graduate of the University of Arizona where he graduated from James E. Rogers College of Law. During law school, Mr. Celaya received his certificate in International Trade Law, completing his thesis on United States foreign direct investment in Latin America. Since graduating from law school, Mr. Celaya has worked in an immigration firm where he helped foreign investors organize their assets in order to apply for investment-based visas. He also has extensive experience in debt settlement negotiations on behalf of clients looking to achieve debt relief. Mr. Celaya is licensed to practice law in New Mexico. He is located in the Phoenix office. 

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