College Loans for Prospective Students with Poor Credit Scores

August 20th, 2009

Even if your careless youthful spendings have shot your credit through the floor, you can still get financial assistance for your college expenses. Such financial assistance is available through various financial institutions nationwide.

There are those federal student financial aid facilities that are extended by the government to eligible students. If you have bad credit, there are still options for you to take and you do not have to forego your want of a degree just because you think that you are not going to be approved for any financial assistance. Do not quit cold turkey in your bid for a degree without first exploring your options. A lot of students have been able to secure financial aid and put themselves through school even with low credit scores. College loans are possible even if you have a bad credit history. But student loans on bad credit are harder to get so you need to start early in order to secure financial aid for your college education.

Foremost in your financing options should be those financial assistance instruments offered by the government such as federal loans and the Federal Pell Grant. These government-backed student financial aid facilities do not have credit requirements. Money for school expenses disbursed by the Federal Pell Grant are actually not loans and need not be repaid by the student. This is a great choice for college grants for single parents.

No doubt about it, anyone who qualifies for this grant should jump at the great opportunity. Be sure to apply for the Federal Pell Grant ahead of time as it takes a while to have the grant application processed. You can download the FAFSA form from the internet or request for a paper form to be sent to you so that you can start your application for your federal student aid.

If your application for a federal student financial aid is declined, you can turn to your local financial institutions for student loans with bad credit. These private financial institutions could grant student loans with bad credit given the student’s own credit score or with the help of a co-signor with a good credit standing.

Unfortunately, getting student loans with bad credit on the basis of your own credit would result in credit terms that are not exactly within market levels. Expect to be slapped with higher interest rates on these student loans with bad credit. You have a better chance of getting approved for these kinds of loans when you visit the financial institution yourself to talk to a loan officer and apprise him of your plans to repay your loan. Facing your lender beforehand conveys the impression that you are serious about being a responsible student and borrower.

The last recourse for those applying for student loans with bad credit would be to ride on the credit of a co-signer with good credit standing. The credit terms of student loans with a co-signer are better than those granted based on the student’s credit score.

For some loan agreements, there is a co-signer release option that is included in the contract provisions. Under the co-signer release option, the lender can release the co-signer as a party to the loan contract when the borrower pays on time for 48 consecutive months. With your co-signer released from the loan contract, whatever you do on your loan such as continuing to pay your repayments on time would work towards rebuilding your own credit.

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