There are instances where college students who are in need of student loan assistance or other financial aid may have a bad credit score as a result of poor financial habits or having little to no credit history. Particularly when it comes to student loans, a bad credit score can be problematic for some students who are seeking certain types of loans. However, federal student loans and other financial aid opportunities are available for students who have a bad credit score and are in need of tuition assistance.
For starters, scholarships and grants often are available to many college students who may not have the income or financial means to pay college tuition costs. Typically, scholarships and grants are offered based upon one’s academic merit or financial need and do not consider a bad credit score into the equation when granting these forms of financial aid. Scholarships and grants do not have to be repaid, so there is no need for a credit history to be involved with these types of financial assistance.
However, there are endless forms of scholarship and grants available so any bad credit student borrower who may worry about their student loan opportunities will benefit from seeking out as much assistance from these forms of financial aid as possible. Scholarships come in all shapes and sizes and are available to either a wide variety of individuals or some may be granted only for specific groups, like mothers, military personnel, or minorities. Individuals who may have a poor credit score are often advised by financial aid counselors to exhaust their scholarship and grant opportunities before turning to loans.
Yet, federal student loans are often available to bad credit borrowers who may need to supplement their scholarship or grant funds when it comes to paying college costs. Often, scholarships and grants do not meet the requirements that many college students have when considering tuition, fees, and other expenses so there are instances where student loans are necessary. In these cases, federal student loans are often a bad credit borrower’s best option for obtaining student loan assistance.
While there are private loans available for students who need financial aid, typically, these types of loans will factor in one’s credit score or require a cosigner before being offered. Also, private student loans may have a higher interest rate if they are linked to an individual with a bad credit score. For this reason, federal student loans are often applied for seeing as how they do not take one’s credit score into consideration and can be quite helpful in meeting college tuition costs.
There is also the benefit of more affordable interest rates, in some cases, and repayment assistance options on certain types of federal loans. Yet, students who have a bad credit score, though, may want to be wary about borrowing student loans if their poor credit score is the result of bad financial habits and they still have other forms of debt. While student loans are available to bad credit borrowers, they will not be beneficial to a student’s financial life if a bad credit score is the result of unpaid debt. It’s for this reason students who are looking to borrow may need to look at their personal financial situation to make sure that student loans will be manageable after graduation and will not do further damage to one’s credit score.