Student Loans With Bad Credit: Essential Facts to Keep in Mind
A bad credit history should not prevent people from attending college. So, credit checks are often ignored, allowing college-goers to get student loans with bad credit, regardless of their financial past.
There is no about that it is easier for an applicant to get loan approval with no credit checks than when lenders look through their credit history. But, of course, not checking the history of an applicant is not a guarantee of approval either, since there are more influential factors taken into account before any decision is made.
Whether the application is for a private or a public (government) funded student loan, individual students need be sure of the terms and conditions that are offered before deciding which loan best suits them.
About Bad Credit Ratings
The influence that bad credit has in any loan application is limited. When it comes to getting student loans with bad credit, scores can increase the interest rate charged and the loan limit that is set. So, it can affect the extent of financial assistance that can be gotten.
By waiving their right to check the scores, a lender is giving the applicant a break. Getting approval with no credit checks means that an applicant that has failed to repay any debts in the past will be treated the same as one than has never missed a repayment.
The interest rate applied to this kind of student loan is higher than usual, but it is also a fixed rate that everyone must pay. This makes it simple to budget for.
Key Factors to Consider
As with most financial aid programs, compromises need to be accepted if approval is to be granted. The interest rate charged on student loans with bad credit are higher because the lender is accepting a higher degree of risk. Statistically, there is a greater chance of a loan being default on.
This extra risk can also be covered by the lenders charging extra fees. And because a popular feature of these loans is the delayed repayment schedule, further fees can be charged too. So, loan approval with no credit checks can mean an increase in the overall cost of the loan.
Another proposed advantage of the repayment delay is that the student has nothing to pay until after graduation. But the downside of this is that when graduation comes, repayments - complete with accumulated interest - are expected to begin. This means by the time student loans are being repaid, the debt has already reached a very high level.
Find a Lender
While there are clear compromises to be made, there is no doubt that applicants seeking student loans with bad credit have a far better chance of getting the funds they need to cover college fees and living expenses. The only question is where to find the best loan.
Online lenders are well-known for offering better finance deals to bad credit borrowers. So, loan approval with no credit checks is much more likely with them. On the other hand, publicly sourced loans from federal government offer loan programs to that are also void of credit check requirements. The most commonly sought are Perkins Loans and Stafford Loans, both of which ignore credit ratings.
What is more, these students loans come with lower interest rates, and better terms. However, there is a limited number available, and not everyone qualifies.
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ABOUT THE AUTHOR
Mark Venite is the author of this article and a successful financial advisor with 20 years of experience. He helps people to get approved for Bad Credit Personal Loans for 5000 and Bad Credit Student Loans Guaranteed. For more information about his services please visit him at http://www.accessmyloan.com