Student Loans With Bad Credit: The Route to Affordable College Education
Financing a college education is not easy, but even when applying for student loans with bad credit, there are options. Knowing which loan program to choose, however, is as important as getting the funds.
Lenders tend to be suspicious of all borrowers, so it is understandable if a student begins with a poor score. But there is an array of financial aid packages specifically designed for those at college. The only question is where to get loan approval with low interest rates and affordable repayment terms.
The choice comes down to one of two options: either a government supported student loan, or a private lender loan. Both have advantages and disadvantages, but it is hard to ignore the fact that the federal option is the best in terms of affordability. But what are the federal options out there?
Choosing the Right Federal Loan
In practically every way, a federal loan is the best option to choose. But as with all financial products, it is the specific needs of the borrower that decide just how much that is the case. When seeking student loans with bad credit, the cost of repaying the debt is the principal concern.
Generally speaking, students find it straightforward to get funding for their education. This is because lenders know that the investment in education will pay off in the future. Because federal loans are subsidized by the Department of Education, loan approval with low interest is guaranteed, while the repayment schedule is usually deferred until after graduation.
There are two main types of student loan programs: the Stafford loan and the Perkins loan. Both are affordable, but the difference is that Stafford loans are designed for those coming directly from high school, while Perkins loans are for those students already in acute financial trouble.
Other Loan Options
There are some other loan programs available to students too, with different particulars meaning they have different types of benefits. The PLUS program, for example, is designed to help lessen the financial burden on parents. So, when seeking student loans with bad credit, this can also be a valuable option.
The Department of Education grants the PLUS loan to the parents based on the calculated drain college fees might have on financial resources. This means that parents no longer have to face the high costs, getting approval with low interest to make repayments easy.
The key difference of the PLUS program compared to the Stafford and Perkins programs is that it provides a greater financial break. The Stafford program, for example, only includes half of the sum borrowed with the rest taken on by parents. So, the PLUS student loan goes a little bit further.
Basic Program Criteria
When applying for student loans with bad credit it is important to satisfy all of the required criteria. Federal loans are not handed out to just anyone, and qualifying has more to do with showing an inability to repay private loan programs than anything else. The funds available are limited so only those in need of financial aid will receive it.
Of course, the right program will depend on the needs and budget of the applicant. For example, students who are struggling to meet living expenses can apply for a Perkins loan.
However, applicants must be able to prove financial hardship before they can look forward to getting approval with low interest. By calling into your financial aid office the right student loan program can be identified. This is the best place to begin.
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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