Poor Credit Student Loan

The pursuit of the American dream of a stable income, decent retirement, nice home and ability to provide for a family seems to be slipping out of reach for many people today due to the current state of the economy. Despite claims that the economy is recovering, we still have a long way to go. One thing remains certain, if you want any shot at being able to achieve the American dream, you need to go to college to get a degree. Education is the key to bettering your own financial condition and paves the way for you to be able to achieve the ever-elusive American dream. There is one problem: College tuition is not getting any cheaper.

College is very expensive. College tuition is on the rise, and tuition rates are at an all-time high, increasing year after year. College may be one of the most expensive investments you ever make, apart from a house or a car. Unless you or your parents have scrimped and saved substantial funds in a savings account or in a college fund, your only other recourse for being able to go to college is to get a loan.  Unfortunately, however, with the way that the economy is headed, many people have lost their jobs or been downsized, are unable to pay their bills, and therefore have bad credit. Conventional wisdom dictates that in order for you to get any type of loan, whether it is a mortgage, a personal loan, an auto loan, or a student loan, you need to demonstrate that you have credit and are a creditworthy risk for the banks or the government to be lending you money to go to school.

This lends itself to a catch 22 or the classic “chicken and the egg” scenario: You need to go to college in order to get a good job, so that you can get out of your financial rut. But in order to go to be able to go college so you can get a job that will help you get out of your financial rut, you need to afford it or be creditworthy enough to be awarded a student loan. If you have bad credit, do not despair. There is some good news. The good news is that you CAN get a poor credit student loan. Getting a poor credit student loan is within reach for ANYBODY, regardless of how bad your credit score is, thanks to loan programs by the United States federal government and the US Department of Education.

A poor credit student loan is called the Stafford Loan. This is a loan put forth by the federal government and it is free to apply. There is no credit check for this and the application is straightforward, online, and uses your tax information (and your parents’ if you are a dependent student. This poor credit student loan is perfect for those students who have little or bad credit. It is easy to apply for this loan on the FAFSA website.

There are some banks that offer private student loans and these are often used if the amount of Stafford loans is not enough to cover the cost of tuition. Private student loans are harder to get as a poor credit student loan, and you are contractually obligated to repay the loan at a much higher interest rate than if you had decent enough credit to qualify for a conventional loan with a lower interest rate. This can result in higher payments. You will most likely need a cosigner on your loan, although that is not always necessarily the case.  While it may seem like a losing proposition, making high minimum monthly payments when you graduate from college and start repaying your poor credit student loan, consider that you are making an investment in yourself. You are making an investment in your future. Once you graduate from college, your earning potential should be great enough that you can afford to make those monthly payments. You should not let the prospect of making monthly payments on a high-interest poor credit student loan scare you away from taking out that loan to go to college. College is an investment that pays for itself many times over.  The pursuit of the American dream is still very much alive and well for all Americans, regardless of your economic condition. Getting a poor credit student loan represents an opportunity for you to pull yourself out of your financial rut by your own proverbial bootstraps.

Leave a Comment