Student Loans with Bad Credit: You Can Get a Loan for School with Ease

When people who have bad credit fall on to hard times, it is natural for them to want to try and earn more money through retraining and getting a new job. However, that means going back to school, which costs money they clearly do not have. With bad credit, finding a loan to pay for school may seem like an impossible task. However, the rules that apply to typical loans, such as auto loans and home loans, do not apply to student loans. Once you familiarize yourself with the options available, the prospect of finding money to pay for school will be a snap.School Loans Are DifferentWhen people sit down with a lender to try and get a loan they are often subjected to a thorough run-down of their finances. This includes looking at past behaviors and current debts in the form of a credit check. When you have a poor credit score, this is the step where the lender rejects you. Basically, the idea is that if you have too much debt and/or a bad history of repayment, giving you another loan is a recipe for disaster.School loans are different, though. When you are applying for money to fund a higher education, you past behavior does not come into play. This is because money for school is considered an investment. By giving you cash now, a lender invests in your future ability to pay. By getting an education, hopefully, you can get a higher paying, more secure job which will enable you to repay your student loans and improve your bad credit.Because of this, student loans are calculated based on an entirely different scale: need. The less money you have the more money a lender will offer you in the form of student loans.Low, Fixed Interest RatesIn addition to allowing you to borrow money with bad credit, student loans also come equipped with low, fixed interest rates from the federal government. This means that the interest you pay (generally around 6.8%) will remain steady through the life of your loan, regardless of your bad credit.To get these low interest student loans, you need to fill out a FAFSA or Free Application for Federal Student Aid. This form is usually included with your college applications, but can also be obtained through the Financial Aid office of your school.Repaying Your Loans Can WaitThe final benefit of student loans is that they are deferred. This means that as long as you are in school taking a minimum of 6 credits during each semester, you will not need to repay your loans. Once you graduate you are given a grace period of 6 months where you have the ability to find a job that will support your loan repayment. In this way, student loans allow you to focus on what’s important: your education.Long-Term Benefits and One Major CaveatBy taking the opportunity to go back to school and get a higher paying job, you are setting yourself up for the long term. The bad credit you have today will disappear once you earn enough money to support your debts and obligations. However, there is one, important caveat to remember when taking student loans: they never go away. In order to justify extending loans to those with bad credit, the federal government will not allow student loans to disappear through bankruptcy. This means, no matter what, you will be obligated to repay this money.Therefore, when taking a student loan with bad credit you need to make sure that you are really serious about finishing your education and changing your life. The long term benefits are truly well worth it though.