How to Rise Above the Bad Credit to Secure Student Loans for Grad School
Posted by Frank Gogol in Loans | Updated on September 14, 2023
If you’re considering grad school, but your credit score is as low as your enthusiasm for all-night study sessions, don’t be discouraged. Contrary to popular belief, having bad credit doesn’t mean you have to give up on your dreams of securing a career. There are plenty of options to help you finance your grad school journey, even with less-than-ideal credit.
Where to Find Graduate Student Loans for Bad Credit?
So, now that you know you can, in fact, secure a graduate loan with a less than stellar credit, you’re probably wondering where to start your search. Luckily, there are a few places you can turn to without the fear of judgment or rejection.
Federal Student Loans:
First, start by exploring federal student loans. These loans are popular for grad students because they tend to have lower interest rates and more flexible repayment options. Don’t worry if your credit isn’t great – federal student loans have varying credit requirements, and some don’t require a credit check. When it comes to federal student loans, there are a few different types to consider. These include:
Direct Unsubsidized Loan:
- Available to both undergraduate and graduate students
- Do not require a credit check
- A great option for those with bad credit
- The interest rates are fixed and tend to be lower than those of private loans
Direct PLUS Loan
- Available to graduate students and professional students
- Require a credit check
- Credit requirements are not as strict as those for private loans.
- If you have bad credit, you may still be eligible for a Direct PLUS Loan as long as you don’t have an adverse credit history.
Private Student Loans
In addition to federal student loans, private student loans are available for graduate students. Private lenders often have their own credit requirements, which can vary from lender to lender. Some lenders may be more willing to work with students with bad credit, while others may require a cosigner. It’s important to shop around and compare different lenders to find the best option for your specific financial situation.
When considering private student loans, reviewing the terms and conditions carefully is important. Pay attention to the interest rates, repayment options, and any fees associated with the loan. It’s also a good idea to consider the lender’s reputation and read reviews from other borrowers. Doing your research can help ensure that you find a reputable lender on terms and conditions.
Which is Better?
While having bad credit can make finding graduate student loans more challenging, there are still options available. Federal student loans, such as Direct Unsubsidized Loans and Direct PLUS Loans, can be a good starting point. Private student loans from reputable lenders can also be an option, but it’s important to review the terms and conditions carefully.
It’s worth noting that graduate student loans, whether federal or private, are a serious financial commitment. Before taking out any loans, it’s important to carefully consider your future earning potential and how the loan payments will fit into your budget.
Both loans are suited for audiences with specific needs. To better understand which loan may be suitable for you, speak with a financial advisor or a representative from your school’s financial aid office. But with some research and careful consideration, you can find the right graduate student loans for your needs, even with bad credit.
Federal Student Loans for Grad School: Requirements
It’s important to note that the requirements can vary depending on which type of loan you’re applying for. Below, we’ll look at the requirements for direct unsubsidized loans and grad PLUS loans
Requirements for Direct Unsubsidized Loans
You may have just been looking for specific requirements for these loans. For direct unsubsidized loans, the main requirement is that you must be enrolled at least half-time in a graduate program. This means that as long as you’re pursuing your graduate studies with the necessary dedication, you can benefit from the financial assistance provided by these loans.
Requirements for Grad PLUS Loans
On the other hand, Grad PLUS loans have a few additional requirements. In addition to being enrolled at least half-time, you must also meet the general eligibility requirements for federal student aid. This includes being a U.S. citizen or eligible noncitizen, having a valid Social Security number, and maintaining satisfactory academic progress. These requirements ensure that the loans are provided to students who are committed to their education and genuinely need financial assistance.
It’s important to note that both types of loans require you to complete the Free Application for Federal Student Aid (FAFSA) to determine your eligibility. This application considers various factors such as your income, assets, and family size to assess your financial need and determine the amount of aid you may receive. So, regardless of the type of loan you’re considering, it’s reassuring to know that there are options available to you. These loans provide a lifeline to grad students determined to pursue their academic goals and further their careers.
What to Do If You Have an Adverse Credit History?
If you have an adverse credit history and your grad school dreams are on the line, don’t despair just yet. There are a few steps you can take to improve your chances of qualifying for student loans.
- First, explore alternative funding options. Scholarships, grants, and part-time jobs can all help reduce your reliance on loans. This can lessen the financial burden and improve your chances of securing a loan if you still need one.
- Second, take the time to work on improving your credit score. While this may not be feasible if you need loans immediately, it’s worth investing some effort into rebuilding your credit. Making timely payments, reducing debt, and keeping your credit utilization low can all contribute to a better credit score.
- Finally, consider finding a cosigner. Having a cosigner with a good credit score can greatly increase your chances of getting approved for a loan. Plus, having a cosigner can also help you secure a lower interest rate, saving you money in the long run.
Private Student Loans for Grad School: Good Credit or a Cosigner Needed
If federal student loans and other funding options don’t fully cover your grad school expenses, private student loans can fill the gap. However, keep in mind that private lenders often require borrowers to have good credit or a cosigner with good credit in order to qualify.
If you have a good credit score, private lenders generally offer more favorable loan terms, such as lower interest rates or more flexible repayment options. On the flip side, if your credit score isn’t up to par, having a cosigner can significantly improve your chances of getting approved for a loan.
So, don’t let bad credit keep you from pursuing your educational goals. With a little research and determination, you can find student loan options to help you finance your grad school journey.
Best Private Student Loans if Federal is Not an Option
When federal student loans don’t cover your educational expenses, private student loans and personal loans can bridge the gap. They offer competitive interest rates, flexible repayment terms, and excellent customer service.
Here are some of the best private student loan options so you can take charge of your education, regardless of your credit score:
- Spring Loans
- First Premier Lending
- College Ave
- Sallie Mae
Read on to learn more about our top picks!
AmOne is a game-changer in the lending sphere. With a razor-sharp focus on loan matching, they are the go-to for borrowers seeking the ideal lender connection. Those navigating the winding roads of finance can trust AmOne to lead them to bespoke solutions. While not specifically a student loan lender, personal loans can be used to pay for education costs.
Within the sphere of Spring Loans, a plethora of lending options awaits. Tailored for those seeking flexibility, Spring Loans presents an array of terms, ensuring solutions for a wide range of needs, including education.
First Premier Lending
Navigating the world of 1st Premier Lending, one encounters a dedication to tailor-made lending. Their knack for tuning into the distinct needs of clients has led to the creation of a vast loan portfolio, spanning personal dreams to business aspirations.
College Ave offers variable APRs between 5.49% – 16.99% and fixed APRs from 4.59% – 16.99%. Loan amounts vary from $1,000 to the total cost of attendance, with flexible terms of 5, 8, 10, or 15 years and a minimum credit score requirement of 650.
Upgrade offers loans ranging from $1,000 to $50,000 with APRs between 8.49% and 35.99%. They provide flexible terms of 24 to 48 months and require a minimum credit score of 600.
Sallie Mae provides variable APRs from 6.37% to 16.70% and fixed APRs from 4.50% to 15.49%. Loan amounts can range from $1,000 to the total amount to cover the cost of attendance, with terms lasting 10 to 15 years. A credit score of 745 may be required.
Navigating the maze of graduate student loans when you have bad credit can be daunting. However, it’s essential to remember that there are numerous options available, both federal and private. It’s all about finding the right fit for your unique situation. From the flexible conditions of federal loans to the range of private student loan options, there are avenues you can explore. While securing the best terms might require extra legwork, your dedication to advancing your education and bettering your future is worth the effort. Always approach borrowing with an informed mindset, considering the long-term impacts on your financial well-being. Reach out to experts, do your research, and remain steadfast in your pursuit of higher education. Your dreams are valid, and with the right financing, they can become a reality.