Getting a student loan when a bad credit score is present is an option for the majority of individuals who are attending a college or university and, for whatever reason, may have acquired a low credit score before entering into their educational career. However, students who are in need of loans to help meet college tuition costs and fees, but may have a poor credit score and history often are worried about interest rates that may be associated with these forms of financial assistance that are needed to pay college costs.
Federal student loans and private loans are still used by numerous students across the nation who do not acquire enough scholarship or grant assistance to meet all of their college expenses and needs. However, these types of loans can greatly differ depending on the type of borrower and their financial position. Private student loans can be made available for these bad credit borrowers, but may come at a higher interest rate or require a cosigner as a result of the student having a low credit score or even no credit history. It’s for this reason that many turn to federal loans as these types of student financial assistance programs do not require a credit check and can be accessible to almost anyone attending a college or university no matter their credit score.
However, these options which may be available to bad credit student borrowers are not always beneficial for anyone who may need this form of financial aid to pay for tuition, fees, or even books. Obviously, financial aid counselors heavily stress that scholarships and grants should be extensively explored before students turn to borrowing, especially if these individuals have a bad credit score. It goes without saying, any student who can acquire free sources of financial aid that will not require repayment after graduation will be in a better financial position upon receiving their degree, however, students who are in a bad credit position may be in one of two categories in terms of the helpfulness of a federal student loan.
Individuals who may have debt remaining that has caused a bad credit score are typically advised against borrowing, even if it’s to pursue a college education. Adding more debt to a bad credit situation where debt is already present can be incredibly detrimental to one’s personal financial life, even though some students feel they will be able to pay off these bad credit debts before their student loan payments are due.
While this may be the case for some, a great deal of caution and discretion must be used when a bad credit borrower with debt obligations present begins considering loans to make college tuition costs. However, some students who have had a bad credit score yet have had no debt remaining may benefit if they need to borrow student loans, as prompt and timely repayment of these debts can reflect well on one’s credit history and score.