Ben Todd | Apr 16, 2017 | 3
Student Loans With Poor Credit
Even people with bad credit need education loans. If this is you, we can help. While we don’t give you the loan, we can give you valuable advice to find help paying for school.
The federal government offers the best loans for student with bad credit. There are three types of loans backed by the government and each of them is awesome. Here are some details on some of the top student loans with poor credit.
For students with poor credit, these are, without a doubt, the best student loans. They have lower interest rates than other loans and no need to repay while you attend school. Even better is that you aren’t charged any interest as long as you’re in school. The federal government covers the interest when you’re in school. Six months after you graduate, you will take over the interest and loan payments.
You qualify for these loans based on need not credit. Perkins loans are not offered to those with additional resources (such as parents money) to pay for school.
Subsidized Stafford Loans
Subsidized Stafford Loans are just like Perkins loans but they have higher interest. The government also backs this type of loan and covers the interest when you’re in school. Just as with Perkins, eligibility is determined by need and not credit. These are a good choice for someone who has problems paying for school. You can only borrow a certain amount with this type of loan.
Unsubsidized Stafford Loans
This type of loan is backed by the government but eligibility is NOT based on need. Credit is not a qualifier and so most people can get these loans. With Unsubsidized Stafford Loans, the government doesn’t pay interest for you. When you have this loan, there are two payment choices:
1. Pay some while you attend school. If you don’t want to pay a lot of interest, this is the best option. For those who decide to forgo payment til graduation, the accumulated interest is added to the principal. This means that you will be paying interest on interest. 2. Forgo payment until you finish school. This option should only be used as a last resort. With this option, interest accumulates and gets added to the principal of the loan. After graduation, the principal is recalculated and the loan begins again.
All of these options can be applied for in the same way. You complete a FAFSA (free application for Federal student aid). The information on this form is used to determine your eligibility for loans. You’ll need to give information about your yearly earnings and in some cases your parent’s earnings.
No matter what others say about them, these loans are the best option for those with poor credit. Private loans of any type will definitely cost more in the end.