Students With a Bad Credit Student Loan
A consolidation loan is one that allows you to combine more than one of your student debts into a larger one with a single lending institution. The new lender uses the funds to pay off the balances of all other student loans that you have.
For any borrower (and that includes a student with student loans), bad credit is like a black cloud hanging above his or her head. It's very important for a student to have a positive credit rating in order to apply successfully for another student loan in the future. Since not all loans can satisfy all the student's expenses, some students are applying for at least one other student loan to tide them throughout numerous expenses like food, lodging, school fees and many other living expenses. If not handled properly, the student might not afford to complete repayment of the acquired loans in time. Worst case scenario, the borrower will pay so many loans that it might be possible to file a bankruptcy.
Many agencies, both private and public, are offering student loans with different benefits and flexible options. However, a student's chances of securing another loan get slimmer if lenders gave a bad credit score. The bad credit score often reflects on the student/borrower's inability to pay the loan in its entirety and on time.
There are still options for students who have bad credit. A student can still apply for a student loan if there will be a co-signer for the loan. A co-signer should have a good credit history and can guarantee the loan if the worst happens. Most often, a family member or friend can acts as a co-signer for a borrower's student loan.
A borrower with bad credit can still apply for at traditional lenders. However, the loan will have a higher interest rate, which will be determined by the amount of the loan, the repayment periods and the borrower's credit score.
Another solution is to apply that don't require a student's credit history. The government offers non-credit loans while some private agencies have some available scholarships and grants. Examples of these are Stafford Loans and Perkins Loans. Stafford Loans are by far the most popular choice for undergraduate and graduate students. A Stafford loan can either be subsidized or unsubsidised. A borrower can reapply every year for a loan. On the other hand, Perkins Loans entertains borrowers who are really in need of funding and it awards a limited amount of money. Like Stafford, Perkins has undergraduate and graduate students in its roster. Prospective borrowers cannot completely rely on these programs because these loans are also sought by others. It is better to find other sources of educational funding.
It is hard to find a trusting lender who will provide a student loan to a borrower with bad credit history or no credit history. Many borrowers should be aware that some entities often promise to give student loans, only to be revealed later as scams. Borrowers should always be careful since a scam will greatly affect their time, education and future.
In the end, there's always hope even for the student with bad credit.
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Learn how to get a student loan with bad credit and more information relating to bad credit student loans.