Use the Government or Go Private for Those Bad Credit Unsecured Student Loans

Finances Are Tight for College StudentsNoodle cups and empty wallets are pretty typical for the average college student. Finances are tight. These times are also when students are offered lots of credit cards. Talking about a way to get into high debt, this is it. Often the bills go unpaid and lots of students are already developing bad credit histories and digging themselves into a financial hole while they really are not aware of what is going on. Before taking any of these financial hurdles, you must first gain a financial education.Federally Backed Student LoansThere are many federally funded student loans for which you can apply. Of course, you may not qualify for all of them. But for those that you do, this is the best way to fund your education. These government unsecured loans have very low interest rates, the have agreeable repayment terms, and payment is deferred until your studies are finished. To find these loans, talk to your financial counselors at your school or do a search on the Web. You will be asked to fill out a Free Application for Federal Student Aid (FAFSA). It is an overall application for government sponsored student funds.Private Lender Student LoansIf you cannot qualify or do not want to go with government loans, there are other options. Banks or credit unions offer unsecured loans for many uses, student expenditures among them. You are not obligated to use these loans in any specific way. You can use them to consolidate your debts, like all the credit cards mentioned above, pay your living expenses, or whatever is crucial at the time.Hard to GetOne of the bad things about using banks or credit unions for these unsecured loans is that they can sometimes be difficult in terms of qualifications. And they put you in a larger pool of borrowers who want unsecured loans. Banks and credit unions only have so much to lend. You may be a riskier client than other loan seekers. This is the riskiest type of loans for banks and credit unions, so their requirements are rather high and interest rates can be high, too.Show Some CollateralIf you cannot qualify for one of these private loans, it may make a difference if you have something valuable to offer to secure the loan. This will make you a better risk and more attractive to a lender. Is your late model car paid off. You might be able to use it for a $5,000 loan. Another thing about offering security of this type is that your interest rates can drop significantly. That is a good thing!Options, Options, OptionsMany places exist that offer bad credit student loans. Most of them can be found on the Web. You know the Web, do you not? Of course you do. While you are surfing, check out the sites for student loan lenders. Pick out five or six who offer the best rates and the most comfortable repayment terms and see what each can do for you. You might want to use a broker. That way your information only has to be submitted once and the broker will come up with a list of lenders who would be most willing to lend to you depending on the financial information you have imparted. This way your credit history only takes one hit.Too many hits on a credit report over a short period of time makes lenders think you are desperate for credit and therefore too risky to lend to. The main thing to do while you are a student is to keep your credit scores as high as possible while still getting the funds you need to keep in school.