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If you need a student loan but have little to no credit history, you’re not alone. In fact, more than 80% of 18- to 19-year-olds don’t have a credit score at all due to a lack of opportunity to develop one prior to attending college.
But just because you don’t have a credit history, doesn’t mean you can’t secure funding for your education. Student loans with no credit check are available from the federal government and some private lenders.
In this article, we’ll review your best options for no credit check student loans.
Compare student loans with no credit check
How to take out student loans with no credit check
When taking out student loans without a credit inquiry, you should always start with federal student loans and then fill in the gap with private loans. The reason for this is simple: federal loans come with lower rates and additional repayment benefits.
By following the steps outlined below, you can improve your chances of securing student loan money at the most affordable rate possible.
Step one: Fill out the FAFSA
Filling out the FAFSA, or Free Application for Federal Student Aid, should be the first step for all students looking for student loans.
This application is used by the Department of Education to determine your student loan eligibility, as well as your eligibility for free aid, such as grants and work-study programs.
Completing the application is free and can be done online. You’ll need to submit the FAFSA every year you’re enrolled in college to review your eligibility.
Step two: Review your federal student loan eligibility
After filling out the FAFSA, you’ll receive a Student Aid Report (SAR) that will include a summary of your estimated eligibility for federal student loans and other aid.
The U.S. Department of Education offers federal student loans through the Direct Loan Program to eligible undergraduate and graduate students, regardless of credit history. These loans include:
- Subsidized Direct Loans: These are available to undergraduates with demonstrated financial need, regardless of proof of income or credit score. Interest is subsidized for students while they’re still in school, during the repayment grace period, and if loans are put into deferment after graduation.
- Unsubsidized Direct Loans: These are available both to undergraduates and graduate or professional students. Income and credit score do not matter, and neither does financial need for this type of loan. Interest is not subsidized, though, and continues to accrue while in school.
While there is also another type of federal loan — PLUS Loans — available to graduate students and parents of dependent undergraduates, these loans require a credit check.
Unfortunately, there are annual and aggregate federal student loan limits. If you’ve reached your limit without receiving enough money to cover your full cost of attendance, you’ll need to consider private student loans.
Step three: Compare private student loans with no credit check
If you’ve exhausted your federal student loan options and still don’t have enough money to pay for school, private student loans with no credit check can fill the gap.
Your options will be limited, as most private lenders want to check your credit to determine the likelihood that you’ll be able to meet your repayment obligations. On that note, if you can find a cosigner to add to your loan, we do recommend it. You’ll likely receive better terms and pay less over the life of the loan. If you find a cosigner, check out our picks for the best private student loans for an expanded list of options.
That being said, here are four options if you’re looking for a private student loan with no credit check or cosigner.
7.99% – 13.49%
$3,001 – $10,000
Up to 10 years
Funding U offers student loans to undergraduates with no cosigner or credit requirements. Unlike many private lenders, Funding U focuses not on your credit history but instead on whether your academic achievements suggest you’re likely to repay your loan.
Here are some eligibility requirements according to the lender’s website:
- Must be a US citizen or permanent resident over the age of 18
- Must be enrolled as a full-time undergraduate student in a bachelor’s degree program at an eligible four-year college
- Must meet a minimum GPA requirement
- Your school must meet a minimum graduation rate threshold
- Must be located in Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Illinois, Indiana, Iowa, Kansas, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, New Jersey, New Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, or Wisconsin
Students can apply online and become pre-qualified for a loan in just two minutes without any effect on their credit score. But, if you get approved and decide to borrow, the lender will check your credit report in the underwriting process to verify the debt and prevent fraud.
Here is a full breakdown of the Funding U student loan:
- Fixed rates: 7.99% – 13.49%
- Rate reduction: 0.50% automatic payment discount
- Loan amounts: $3,001 – $10,000 per school year
- Term lengths: Up to 10 years
- In-school repayment options: Fixed or interest-only payments
- Forbearance options: Up to 51 months of no payment while in school
- Grace period: 6 months
- Fees: None
Heads up: Ascent does run a credit check, but offers a loan that those without credit can apply for. We explain this process below.
3.17 – 14.92
$1,000 – $20,000
10 or 15 years
The information above is for the Ascent Non-Cosigned Future Income-Based Loan.
Ascent offers non-cosigned student loans for juniors and seniors. Students can get pre-qualified rates without impacting their credit score. However, if you apply, Ascent will first check your eligibility for its credit-based non-cosigned loan. This means that your credit will be checked.
The difference with Ascent is that eligible juniors and seniors who don’t qualify for the credit-based loan can then apply for the future income-based loan.
To be eligible for a future income-based loan, you must be a borrower with no credit score. If you have a credit score, you must meet the minimum requirement. There is an exception for those that meet the minimum credit score requirement but don’t meet the income or repayment requirements. In this case, you can still be eligible.
Here is a full breakdown of the Ascent Non-Cosigned Future Income-Based Loan:
- Variable rates: 3.86% – 12.94%
- Fixed rates: 5.45% – 14.50%
- Rate reduction: 2.00% automatic payment discount
- Loan amounts: $2,001 – $20,000
- Term lengths: 5, 7, 10, 12, or 15 years
- In-school repayment options: Depends on the loan
- Forbearance options: Temporary hardship, administrative, and natural disaster/declared emergency
- Grace period: 9 months
- Fees: Late payment fee of 5% of the past due payment after ten days late. The minimum late fee is $5; the maximum is $25
Heads up: MPOWER checks a student’s credit history if available, but one is not required to apply.
7.52% – 14.98%
$2,001 – $100,000
MPOWER offers student loans to international students and U.S. citizens, regardless of whether they have a credit history. The company is able to do this by focusing on students’ future earnings potential and partnering with select schools that borrowers must attend.
Since loans are available to students from over 190 countries, the company accepts any currency during repayment. There are no prepayment penalties for paying your loan off early.
Here are some eligibility requirements for the MPOWER loan:
- Be an undergraduate or graduate student within two years of graduating or about to begin a one- to two-year program
- Be attending one of 350+ MPOWER partner schools
Here is a breakdown of the MPOWER student loan:
- Variable APR: Not available
- Fixed APR: 7.52% – 14.98%
- Rate reduction: Up to 1.50% discount
- Loan amount: $2,001 – $100,000
- Term length: 10 years
- In-school repayment: Must make interest-only payments while in school
- Grace period: 6 months
- Fees: Late payment fee
% of salary
$5,000 to $20,000 per year
Edly provides junior, senior, and grad students with an alternative to traditional private student loans. Instead of focusing on a borrower’s credit history when determining eligibility, Edly focuses on the school and program the borrower is attending. By doing this, Edly is able to offer student loans to more borrowers from accepted schools than most private lenders.
You won’t receive an interest rate with an Edly loan, either. Repayment is based on your salary and only begins once you have an annual gross salary of over $30,000.
Here are some eligibility requirements for the Edly loan:
- Must be a U.S. citizen or permanent resident that is a current college junior, senior, or grad student at a supported school
- Must be enrolled full-time
Here is a full breakdown of the Edly student loan:
- Minimum credit score: None
- Cosigner requirement: None
- Loan amount: $5,000 – $25,000 per academic year, $30,000 lifetime
- Minimum income before repayment: $30,000 annual gross salary
- Cap on total payment: Earlier of 60 completed payments, 2.25x the borrowed amount, or 23% APR
- Soft credit check: Yes
Recap of the steps to taking out student loans with no credit check
When taking out no credit check student loans, federal student loans should always be your first option. These loans come with lower rates and better repayment benefits.
If you max out your federal student loans, you can fill in the gap with private loans. Make sure to try and find a cosigner, as this can improve your loan terms and make you eligible with more lenders. If you can’t add a cosigner, consider private lenders that don’t check your credit, or at least don’t factor your credit into their lending model.
Lastly, as you make your way through your college, take steps to try and build or improve your credit. Doing this can improve your chances of receiving better terms in the later years of school.
1 Ascent Student Loans are funded by Bank of Lake Mills, Member FDIC. Loan products may not be available in certain jurisdictions. Certain restrictions, limitations; and terms and conditions may apply. For Ascent Terms and Conditions please visit: www.AscentFunding.com/Ts&Cs. Rates are effective as of 10/01/2022 and reflect an automatic payment discount of either 0.25% (for credit-based loans) OR 1.00% (for undergraduate outcomes-based loans). Automatic Payment Discount is available if the borrower is enrolled in automatic payments from their personal checking account and the amount is successfully withdrawn from the authorized bank account each month. For Ascent rates and repayment examples please visit: AscentFunding.com/Rates. 1% Cash Back Graduation Reward subject to terms and conditions. Cosigned Credit-Based Loan student must meet certain minimum credit criteria. The minimum score required is subject to change and may depend on the credit score of your cosigner. Lowest APRs require interest-only payments, the shortest loan term, and a cosigner, and are only available to our most creditworthy applicants and cosigners with the highest average credit scores.
Author: Jeff Gitlen