Blog Archives

Getting A Personal Student Loan To Use For Your Schooling & Bad Credit Eligibility

May 5, 2012

Personal Student Loan

Personal Student Loan


A personal student loan is another phrase for a private student loan in which you obtain it from a financial institute that is not federally funded. Now personal loans for students can come with benefits as well as drawbacks, just like anything else in life.


The main benefit of personal loans for school is the fact that they can cover your entire cost of education minus any part of your education being funded by grants or other sources like financial aid coming from your family, so they are essentially your solution to your tuition problem allowing you to be able to still afford school when grant money doesn’t offer you enough to pay for college. Personal student loans are also distributed a lot faster, versus having to fill out a FAFSA and wait for what can be over a month before you find out what you are going to be getting from the Stafford Loan, Perkins Loan or the PLUS Loan programs, which the money is usually distributed to you in a few days. Which while we are on the money aspect, you have so much more freedom to accessing the money as private studentl loan funds are deposited into your account or you receive a check in the mail, versus federal loans where your school usually holds onto the funds and dictates when you can spend it which you will need to talk to your school each time you need to use your federal student loans.


Now personal student loans get a bad name due to the fact that they are known to come with higher interest rates, as well as rates that are variable which simply means the interest rate can vary or go up and down at any given time, which unlike federal loans which are fixed meaning the interest rate never changes once you obtain the loan. So basically the lower your credit rating is then the higher your interest rate is going to be, meaning once you pay it back then you will be paying more in interest dues. But their is a flip side to this negative as credit score doesn’t dictate your eligiblity for personal student loans as you can almost always get funds regardless of what your credit score is.

What To Do If You Have A Low Credit Score

If you happen to have a bad credit score then the best thing to do first is look for a cosigner who has a good credit score as they can help you get a personal student loan that both have a lower interest rate, along with better overall terms. Now if you cannot find a cosigner that is willing to cosign for your student loan, which most people can’t then you can visit a credit union which offer personal student loans that have better interest rates than most all other private financial providers when it comes to applying with a bad or no credit score.

If you cannot get personal student loans from either one of these sources or need money fast, then the last option which you should use as a last resort is taking out a Payday Loan which you can get money in as little as 24 hours which funds can be up to $1500 or much more. With these personal student loans are unsecured loans which require no collateral and they don’t even ask you what your credit score, which the only thing that dictates your elibibility is whether or not you have a steady job and can afford to pay them back, but the interest rates are super high and needs to be paid back within usually a month or two.

When shopping around for personal student loans, the main thing that you what to remember is to look at all the terms as they may come with low interest rates but might make up for it by charging you with large late fees and other large fees that can cost you more in the long run.

How To Consolidate Student Loans

March 11, 2012

How To Consolidate Student Loans

Consolidate Student Loans

For those asking the question of how to consolidate student loans that have either a vague or zero understanding of how the consolidation process works, well to make it simple consolidation is when you basically group together all of your loans, student loans in this case, and only pay one payment on the total sum of all your student loan debt. The simple act of consolidation will not only provide you with the benefit of only having to pay one monthly payment to one lender, it can also lower your interest rate as your interest reate will be around the average of all the loans interest rates that you are consolidating, as well as lower the monthly payment.

Lower payments are always great but they come with a price, which the lower payment will mean an extended repayment period which will both keep you in debt longer as well as you will pay more over the life of the repayment compared to paying to off with a shorter repayment term. But the good thing about having a longer repayment term is that it will give you time to get a job while you have a low monthly payment, then start paying larger payments when you afford it, where consolidation companies usually allow you to do so without penalty. Before we get into answering the question how to consolidate student loans in it’s extent, it should be known that you can actually consolidate just one loan and still enjoy the benefits of consolidation.

Another aspect of answering your question of how to consolidate student loans is the part that for the most part, federal student loans and private student loans need to be consolidated seprately. These consolidation loans are granted in the form of both secured and unsecured loans, and once they are given your credit score can actually go up as all of your student loans will be paid off by the consolidation company, which will show up as mutliple loans paid off, bumping up your score.

All in all the act of student loan consolidation can provide you with immense value, especially for those nearing student loan default as it can keep you from having to default on your student loans because you cannot afford the monntly payment. If you are in this situation then a lower monthly payment that is offered through consolidation companies can help you avoid many negative things.

Private Student Loan Consolidation

Now when it comes to how do you consolidate student loans, well there are two distinct ways, those being either through a private consolidator for those with private loans like through Sallie Mae or Next Student who are both some of the largest private student loan consolidation providers. To get started with the process of private student loan consolidation, the best thing to do is contact providers directly who can get you going on the process of consolidating your student loans.

Federal Student Loan Consolidation

Or for federal student loan debt, one would use the Federal Student Loan Consolidation Program which is provided by the Higher Education Act (HEA) where they provide student loan consolidation services for federal loans. If you are ready to utilize federal student loan consolidation then you should visist the Direct Consolidation Loans site which can provide you with value information, answering any more of your how to consolidate student loans questions and lend a helping hand to consolidating your student loans.

Drawbacks of Student Loan Consolidation

Now that you known the major aspects of what student loan consolidation entails, there are a few speed bumps that you may encounter, the keyword being “may” because there is a good chance that the process will go smooth. But for examples purposes, below are some of the negative aspects:

  • Consolidating your student loans can actually make you ineligible for certain student loan forgiveness and relief programs.
  • Certain loans are often not excepted when it comes to federal loans as well as loans that were obtained before a certain date.


Low Interest Student Loans – Both Federal & Private

March 9, 2012

Low Interest Student Loans

Low Interest Student Loans

Low interest student loans can be obtained, both federal as well as private, which we shall delve into the topic of how to get low interest federal loans first. The most sure fired way of getting low interest student loans for government lending is filling out a Free Application for Federal Student Aid (FAFSA), which by doing so you will be apply for a host of different student loan programs at the same time, two of which include:

  • The Perkins Loan which offers a fixed interest rate of 5%.
  • As well as the Stafford Loan which offers one a chance to get an interest rate as low as 3.4 % and also comes in the form of a fixed rate.

Now filling out a FAFSA will benefit you in more ways than just getting low interest student loans, which the first one is that your credit score doesn’t dictate your eligibility for both the Stafford and Perkins Loans, what determines it is your financial need, as these are needs based loans, which the more you need money the more you will be lended. The other main benefit that comes with filling out a FAFSA is the fact that you will also be applying for federal grant programs, like the Pell Grant among others, which can offer eligible applicants the opportunity to get free money to use towards their tuition and never have to pay it back.

These drawback of these loans programs is that they come with lending limits, which differ for dependant and independent students, which the minimum can range anywhere from $5,500 for undergraduate students to around $20,000 a year for graduate students. Which this may seem like a lot, but remember lending is based off of your financial need, which the amount you altimately qualify for can be a lot lower.

As far as filling out a FAFSA goes, you can start applying for these low interest rate student loans as soon as Janurary 1st of the year that you are looking to get financial aid for. You also need to keep in mind that the FAFSA needs to be filled out every year that you are in school and are looking to get federal financial aid. Even if you feel that you won’t be eligible for federal loans because you think you can prove great financial need, do so anyways as it is shown the a large percentage of those who didn’t fill out the FAFSA because they thought they wouldn’t get any money, would have been eligible if they have submitted a FAFSA.

Not only will federal lending provide you with private student loans, but they come with a lot more flexible repayment terms, compared to the likes of private loans. They have introduced the repayment program called Income Based Repayment (IBR) which offers an option for those stuggling with money to be able to pay around 15% of what they are making as a loan payment, which the payment can be as low as $5. The last great benefit of obtaining federal student loans is that the interest is fixed on the Perkins and Stafford, meaning the interest rate will never change once you obtain the loan, unlike private loans where they APR rates always fluctuate.

Private Low Interest Student Loans

Now the words low interest and private student loans are rarely used together, but this should deter your from considering the option of using private lending when your federal lending has not provided enough to cover your tution and other related expenses. Which before we go into how to get low interest student loans, we want to advise you to only apply for private student loans as a last resort, meaning always utilize federal financial aid first and other sources, as private student loans are known to come with substantially higher interest rates as well as shorter repayment terms. Now how can you get low ineterest student loans from private lenders? Well the most sure fired way of doing so is to borrow from:

  • Credit Unions – Credit unions are known to offer student loans with comparable interest rates and repayment terms of the likes of federal student loans. They are also more lenient in providing better chances of eligibility to those who have bad credit scores as well.

To start applying for low interest student loans through credit unions, you need to visit your local credit union and become a member.

As far as other private student loans go, those which can be attained through large and small banks and other private lending companies, the positive aspect of borrowing this way is that these corporations will be able to provide you with a much larger sum than what federal loans can offer. The amount that is offered by private lenders will be the amount you need to cover your tution minus whatever federal student aid and other financial aid sources have provided you.

Low Interest Student Loans Through Charities

There are a host of different charities out there that offer either low interest student loans, or absolutely no interest student loans, which these programs are non-profit and offer those a chance to attain education and not be burdened by high interest rates when the payoff period begins.

Bad Credit Student Loans Without Cosigner – How To Get Them

February 18, 2012

Bad Credit Student Loans Without Cosigner

bad credit student loans without a co-signer

If you are looking for bad credit student loans without cosigner needed, chances are that your credit either isn’t established as many young college students experience, or you don’t have good credit which again you are not alone. Good thing is that there are alternatives that you can utilize that will allow you to get student loans with bad credit and no cosigner, which we delve into right below, allowing you to attain the money you need to be able to afford your college education and start working!

Bad Credit Student Loans Without Cosigner Alternatives

1)  The first alternative that is provided for those searching for bad credit student loans with cosigner is to fill out a Free Application for Federal Student Aid (FAFSA), which this is the holy grail when it comes to obtaining federal aid, which offer loans like the Stafford and Perkins loans which base eligibility off of financial need and not your credit score. These federal loans are offered by the US Department of Education which each offer thousands of dollars in lending funds each year you are in school, which it is a must that you fill out the FAFSA each year you are in school and are looking for federal student aid. Not only will filling out a FAFSA qualify you for bad credit student loans with a cosigner, you will also be applying for federal grant programs like the Pell Grant which offers eligible applicants the opportunity to get thousands in grant money which is money that is given and never needed to be paid back.

Applicants can utilize federal student loans throughout their entire college career, all the way through graduate school. This is the most important step in attaining bad credit student loans because federal aid offers much better repayment terms and interest rates compared to the likes of private loans, which federal interest rates are offered in the form of fixed rates meaning they will never go up once you have obtained the loan unlike variable rates with private student loans. Not to mention the fact that they are also eligible for repayment programs like public service loan forgiveness as well as forgiveness through volunteer organizations like the Peace Corps among others. These loans can also be used for other aspects of your college life like books, materials, a computer and more.

2)  Speaking of grants, grant programs are most always based off of financial need, whether they be federal or private so grants in general are another great alternative to use when looking for bad credit student loans without cosigner.

3)  The other alternative is apply for a ba credit student loan without cosigner through a private lender which in turn will result in much higher interest rates and stricter repayment options, but can still serve as a viable option when you have ran out of federal student aid and still need money to cover the rest of your tuition costs. Being that interest rates are much higher with private student loans, a great alternative to this is applying for private student loans with cosigner through a local credit union whom provide the same type of student loans that come from large private student loan lenders but offer better interest rates and better repayment options.

4.) Although this last option doesn’t provide student loans, participating in the Federal Work Study Program at your college can help you earn money when jobs are scarce as your college will provide you with work, which the work usually encompasses employment in th profession that you are studying to go into. This last band credit student loans without cosigner alternative allows you to earn money which all goes towards paying off your student loans and inturn you get vaulable hands on experience in the profession you are looking to go into which can be demanded by your future employer when you are applying for an entry level job out of college.

Credit Union Student Loans Overview & How To Obtain One

January 30, 2012

Credit Union Student Loans

Credit union student loans are essentially private student loans that are borrowed from a credit union lender in which one must be a member of the credit union in order to apply for student loans. They are becoming popular in the student loan community as when students have used up their federal student aid and need to turn to private loans, interest is always a concern as private loans always offer higher interest, which credit union loans, loans that are private are being offered at rates comparible to federal loan programs. Credit unions are able to offer loans for college tuition because they partner up with private student loan providers, like for example Salle Mae  Although it is advised that one exaust federal financial aid options first as there are many more benefits as well as better interest rates and more flexiblity in repyament along with fixed interest rates unlike private loans, student credit union loans come with their own set of benefits like:

  • Being able to borrow up to the cost of your education minus what federal student aid and other sources of financial assistance hasn’t provided.
  • Many credit unions offer interest rate deductions as a reward for good grades.
  • Most often that not, these loans are able to be taken out with no activation fee.
  • Loan payments can be deferred while in school or paid off while attending.
  • Multi student structered credit union student loan programs are also a possibility for parents paying for more than one child to go to college, which brings about an entirely new set of benefits.
  • Credit union student loans have also boast statistics that show that their median interest rate is right around 6%.

Which like it was said above, in order to get a credit union loan for school, you will need to become a member which you will need to meet certain credentials/requirements, which tend to consist being a of 16 years old as well as filling out an application which needs to be done at the credit union of your choice, which then you will fill out the application at the facility and give it to them to wait for that status of it’s approval or lack thereof. The best way to find local credit unions is to search the yellow pages or online.

Credit Union Student Loans With Bad Credit

If bad credit is an issue, the possibility of obtaining a credit union student loans is still very much there, which one will most likely get a high interest rate which is dictated what is usually a 5 tier credit score chart. This chart basically consists of the best credit scores getting the best interest rates, in which the next best rate is obtained by those who have a credit score that is 1 to 2 percent higher than the best score and so on and so forth. So the best thing to do would be to check with your credit union and find out what the best credit score tier is and then go from there. If you do not fit this bracket or one close to it, then the best thing to do would be to find a co-signer with an interest rate as high as possible.

Credit Union Student Loans Alternative

If you cannot obtain student loans through a credit union, there is a great private student loan program called iHelp which is known to provide loans to students that have an interest rate that is a minimum of 3% less than the bigger named private student loan providers out there like Citi Bank, Sun Trust, Wells Fargo and more.  This nationwide program was created by the Independent Community Bankers of American and offered by the Student Loan Finance Corporation, in which one can be eligible for up to $10,000 every year they are in school, which iHelp is being offered at a myriad of different community banks all accross that nation, currently over 6,000. This credit union student loans alternative can provide one with the opportunity to have up to 20 years to repay their loan, deferrment while in shchool, use a co-signer on their loan for better terms, three different repayment options as well as no penalties for early repayment.

Student Loans For Living Expenses – Overview & Lenders

January 22, 2012

Student Loans For Living Expenses

Student Loans For Living Expenses

Attaining student loans for living expenses can really come in handy when your other loans have provided enough money to pay for you tution, but nothing for the cost of living. What it should be known is the most all grant and loan programs allow the eligible applicant to use the scholarly funds for things other than the tution costs, which include living expenses as well as things like computers and traveling fees like on the bus, grocery bills, etc. Being that student loans cover living expenses, one should be very methodical in the way they go about using their student loan money to cover their living costs, because as you image, the debt can start adding up pretty fast when your using loans to pay for both living as well as tuition. So without saying, filling out your Free Application for Federal Student Aid (FAFSA) each year is a must as this can provide you with federal grant money, which never has to be repaid which then you can use to drop on what you need to live and use the loans that you have to pay back, whether they be federal or private, on the cost of tuition. This way you will minimize the debt total as much as possible so you will end up having to pay back less when your schooling has come to a conclusion.

Finding Student Loans For Living Expenses

The first thing to do to keep in mind when searcing for student loans for living expenses it to make sure you find a lender that doesn’t transfer your student loan funds directy to your school, as this will put your school in control of your funds which usually are only able to be used on semester/quarter tuition. The first step would be to go after federal loans like said above through the FAFSA which you will want to find a program that offers to cover the “Cost of Attendance” but includes living expenses. This should be your first step as federal loans just flat out come with better terms and lower interest rates, meaning you will pay less in interest and more to the lump sum of your debt when you are done with school. If you have exausted the federal resource, ands still need student loans for the cost of living, then you can make a visit to your personal bank and inquire through them about it as most all private loan lenders, or banks offer loans that cover all the tution costs that federal student aid didn’t cover, which includes loan money for the cost of living. If your bank doesn’t provide you with a student loan for living costs, then you can also try other banks or credit unions. Some providers that offer student loans for living expenses include:

  • Chase Bank
  • Sallie Mae
  • Wells Fargo
  • Wachovia

It should be known that most all private student loan lenders demand a good credit score to obtain student loans for living expenses, so you have two options which are either to apply knowing that you have a good credit score, or find a cosigner that does. This will not only allow you to obtain the money for living costs but also provide you with better terms and a lower interest rate. Regardless of whether the lender requires a good credit score or not, providing one will not only bring better terms, but also allow you to borrow a lot more than you would be able to without a good credit score.

Student Loans For Living Expenses – Alternatives

It’s only obvious that students want to minimize their debt total as much as possible, and there is another way to do that without having to take out student loans for living expenses, or minimizing the need. A great alternative you can use is:

  • Federal Work Study Program (FWS) - Over 3,400 schools offer work study programs as well as the program is offered by local, federal as well as state public agencies. The work tends to consist of both work that has similarities to what the student is studying as well as community serivce work among other types, and provide at leat mininum wage, in which the money earned goes directly towards paying for your tuition. In order to utilize this student loans for living expenses alternative, you must file out and submit a FAFSA.


Direct Lending Student Loans

December 14, 2011

Direct Lending Student Loans

Direct lending student loans are any loans that come from the William D. Ford Federal Direct Loan Program, which are set up for the purpose of providing both parents as well as students with loans that have low interest rates, compared to other lenders, especially private. The source that is acutally doing the lending of direct student loans is the US Department of Education themselves. The direct loans that are made available through the Federal Direct Student Loan Program (FDSLP) consist of:

  1. PLUS Loans – These are the loans that are designated for applicants to be either the parent or gaurdian, or in some cases the step parent or a dependable student. Direct lending student loans from the PLUS Loans program consist of borrowers paying fixed 7.9 percent interest rates with benefits that include; no early repayment penalties, interest rate discounts when enrolling in automatic debit as well as you can borrow up to the amount which you need to pay for the students education.
  2. Undergraduate Subsidized Student Loans – These are made available for undergraduate students with fixed interest rates that stand at 3.4 percent, which subsidized loans are for those who have the most financial need. These come in the form of Stafford Loans.
  3. Graduate Subsidized Student Loans – Made available specifically for graduate students, which they pay a fixed interest rate of 6.8 percent. Graduate direct lending student loans also come as Stafford Loans.
  4. Direct Unsubsidized Loans – Which these are for every applicant to apply for and has a fixed interest rate which is at 6.8 percent as well.

(Fixed interest rates are rates that will never go up or down, stay the same, throughout the life of your repayment term.)

Direct Lending Student Loans

Direct lending loans for students allow their eligible applicants to not have to pay any payments on their loan debt until after they graduate, under the circumstances that they enroll in a class schedule that is half time, which is at least 6 credits per semester.

Direct Lending Student Loans Repayment

When it comes to the repayment of direct lending student loans, the terms are the same for most all other federal loan programs, which include:

  • Standard Repayment – Repayment lasts up to 10 years which the minimum payment must exceed $50.
  • Extended Repayment – This options allow one to be able to pay their loans off over 25 years, but they must have at least $30,000 in student loan debt.
  • Graduated Repayment – This direct lending student loan option starts your payments out on the low end, and gradually go up over time, usually increasing every year or two.
  • Income Based Repayment – This program is designated to assist those who are going through a “partial financial hardship”.
  • Income Contigent Repayment – This repayment option has payments that are set up to be 20 percent of what you make each month. This options is only made available for subsidized direct lending student loans.

If you are interested in applying for direct lending student loans, all you have to do is fill out a Free Application for Federal Student Aid (FAFSA), which then your school will have the ultimate say in the amount of money you will be eligible for.

New Mexico Student Loans

November 21, 2011

New Mexico Student Loans

New Mexico Student Loans

New Mexico student loans, or NM student loans as they are also known is an organization that functions off purely non profit efforts and was founded in 1981 by the New Mexico State Legislature and are considered as one of the main driving forces in providing opportunity for advancement in education in the state of New Mexico.

Other New Mexico Student Loans Services

Their “ONE CLICK” section is where you can get access to:

  • Your Account
  • Repayment Calculator
  • Student Loan Forms
  • FAFSA Forms
  • Contact New Mexico Student Loans
  • Site Map
The Student Loan Forms as well as FAFSA Forms section is where you will begin your application process for federal student loans.

Below are the various subsections that the New Mexico Student Loans “Money For College” link offers in their website that are all dedicated to either helping you learn about loans for college as well as getting the money you need to fund your education.


  • The Financial Aid Process – This section is for individuals to learn the exact steps to getting financial aid through federal student loans, which involves filling out a Free Application for Federal Student Aid (FAFSA).
  • Financial Aid Programs – This New Mexico Student Loans section details the different forms that student aid can come in, which include some of the following; scholarships, work study, federal loan programs, the New Mexico College Affordability Grant among others.
  • What Does That Mean? – This is a cool section where you can learn about all the terms that are used when speaking about loans, which all have definitions, like; student loan default, adjusted gross income, student loan deferment, student loan delinquency, forbearance, grace period and more.
  • Commonly Asked Questions – The most commonly asked questions about getting student loans.
  • The Scholarship Process – Exactly how to go about getting scholarships as well as their benefits, as well as application deadlines and more.
  • Lottery Scholarship – Details on the New Mexico Legislative Lottery Scholarship which are scholarships that are offered to those who have either graduated high school or have a GED and intend on enrolling in a public college in New Mexico, as well as the eligibility requirements and more.
  • Scholarship Search Sites – Links to different sites, both local and national programs that offers scholarships to students.
  • Planning For College  - This part of the New Mexico Student Loans Site offers information on the guidelines you must follow that will help you get into college, like tests you must take, test prep courses, choosing a college to attend and more.
  • College Planning Timeline – Timeline list that students should follow that provides an itinerary of what they should be doing each month that will get them closer to their goal of getting into college.
  • Resources – Various links are provided all of which take you to different private and public educational institutions in New Mexico, as well as sites on savings plans for college, admissions and standardized tests, career guidance and more.
  • Be Smart About Your Loans – This New Mexico Student Loans page is dedicated to providing your with tips to follow when thinking about taking out a student loan.
  • Perkins Loan Information – Here you can learn all the updated information on one of the most popular federal student loan programs around, the Federal Perkins Loan.
  • Commonly Asked Questions – Here individuals can learn about most commonly asked questions on student loan repayment.
Among the above New Mexico Student Loan services, you can also attain information on loan repayment, interest rates, tips on how to pay off debt it you are having trouble, as well as tax benefits you can take advantage of and more in their “Borrowers” section.


There are currently 91 learning institutions that offer student aid in the form of both federal and private loans in New Mexico, which consist of universities, vocational schools, community colleges, military institutes, beauty schools and more. If you would like to check if the school you are wishing to attend is one the list of those eligible for student aid, you can visit this link: New Mexico Student Loans

Forbearance On Student Loans – How One Qualifies

November 19, 2011

Forbearance On Student Loans

forbearance on student loans

The act of forbearance on student loans is essentially when you get to postpone or lower your loan payments for either a small amout of time to up to a year or more, if you fit certain requirements, which mostly have to do with the individual encountering financial hardship. During this time, it is likely that one will receive notifications that they must pay interest on their loans only, or let it accrue, or in other words pile up, which if one chooses to allow the interest to accrue, the funds will be capitalized. Student loan forbearance is applicable on both federal as well as private student loans, if you meet certain criteria which is discused directly below.

Requirements For Forbearance On Student Loans

Depending on your lender and other encompassing factors, requirements needed to qualify for forbearance vary, but below are some of main aspects in individual must meet in order to qualify for student loan forbearance.

  • Loan Forgiveness Programs – If you are participating in a program that has you working a job in a low income area, like the Teacher Loan Forgiveness Program. This is applicable to student loan forbearance, as often times these jobs will come with lower salaries.
  • In school – If you are enrolled in school or residency in a schedule that is half time or more, you qualify forbearance on student loans.
  • Financial Burden – If the individual applying for student loan forbearance have student loan payments that are equivalent or higher than 20 percent of their monthly income, they can qualify.
  • Community Service – If you are serving in community service programs, like VISTA, Peace Corps or Americorps, the opportunity for loan forbearance on student loans is possible.
  • Unemployment – If you lose your job and are actively searching for another one.
  • Partially Disabled – If one becomes disabled for a certain amount of time, but is not permanent, and results in them not being abe to work for an extended period of time.
  • Serving – If you are serving in a national service position.
  • If a parent has taken out a loan, and their child is experience financial problems resulting in difficulty in paying off loan debt, parents can inquire through their lender about using forbearance for their situation.

The first thing to do if you are considering forbearance on student loans due to the fact that you are having trouble making your payments, is to contact your loan lender and discuss your situation, as often times they will help you so your debt payments can better suit your situation. Forbearance of student loans should be a last resort, and should be considered after using other alternatives like student loan deferment which can be used for situations like unemployment, financial problems as well when one reenrolls in school, or using the Income Based Repayment (IBR) plan, which is a repayment method offered to those paying off federal loans, and allows one to pay 15 percent of their monthly income, where payments can be as low as 5 dollars per month.

If you have exausted all of the other options, forbearance on student loans can be used as a way to avoid things like defualt and delinquency, which all will have negative effects on your credit score among other things.

How To Get Student Loans With Bad Credit

November 18, 2011

Student Loans With Bad Credit

student loans with bad credit

Students loans are essential to the funding for a large percentage of students tuition fees, but some aren’t sure if they can get a loan because their credit scores are low, or just out of high school and haven’t had time to build up a good credit history. If you fit into this category, no worries, millions do, but don’t let this fact deter you from getting your degree, as you can still get student loans with bad credit. Below are these bad credit student loan methods that you can utilize, that when used can equate to you getting the funds you need to graduate and get your career started.

Federal Loans With Bad Credit

You can easily get federal student loans with bad credit scores, as many programs do not base acceptance off what your credit score is, some of them include the Federal Perkins Loan as well as the Federal Stafford Loan. The way to see if you qualify as well as how much you qualify for is done by filling out a Free Application for Federal Student Aid. By filling out a FAFSA, you will not only find out what federal loan programs you qualify for, but will also see if you qualify for federal grant programs, which will offer you money that you can use towards tuition and other schooling costs, that you never have to pay back, like the Pell Grant. The loans that you will find that are not credit based will be ones that are referred to as Subsidized Loans, meaning they are based entirely off the financial need of the applicant. They assess your financial need by looking at your income as well as the contribution that is given to you by your family or Expected Family Contribution (EFC).

When it comes time for repayment, federal loans have much more flexible repayment terms, and even have an option called Income Based Repayment where you pay 15 percent of your income each month towards you debt and no more. If you use this bad credit student loan method, you will also be getting fixed interest rates on your loans, which means they never change throughout the life of your repayment, or are not variable, which the Stafford Loan currently has interest rates as low as 3.4 percent, and the Perkins Loan interest rates can be found as low as 5 percent,

Private Loans With Bad Credit

Applying for private loans without a good credit score is a little more tricky. These loans are basically there when you need extra money to cover what federal student aid didn’t. Private loans come with higher interest rates and less flexible repayment options, but still serve their purpose when one needs money for school. Non based private student loans are non existent, so the only way to get private loans with bad credit is to find a cosigner, a parent or guardian, family member, or friend who has a good credit score. What is a good credit score? Well private loan lenders like scores that are above 700, and the higher the score is, the lower the interest rate you will get on you loan, which means you paying less in interest over the life of the repayment.

This method is excellent for those who want to build their credit score in the process of paying back their loans, as lenders will actually transfer the loan to your name after 2 or 3 years of repayment, leaving you with a chance to better your credit score with every on time payment, being that 35 percent of your credit score is actually based off of on time payments. It is also suggested that you enroll in an auto debit program if and when you attain a private loan with bad credit, as doing so lowers your interest rate percentage.