Bad credit doesn’t have to stop you from pursuing a college education. The federal government and private lenders offer student loans for bad credit to help you cover college expenses.
Always consider federal loans first, but remember, these loans have limits and may not cover all of your expenses. Compare bad credit student loan options below to find the right option for you.
On this page:
- Compare Student Loans for Bad Credit
- Federal Student Loans for Bad Credit
- Private Student Loans for Bad Credit
- Alternatives to Bad Credit Student Loans
Compare Student Loans for Bad Credit
|APR||Loan Terms||Loan Amounts|
|Direct Unsubsidized*||4.53% or 6.08%**||Varies||Varies|
|Ascent||3.63% – 12.93%||5, 10, or 15 years||$2,000 – $200,00|
|Funding U||7.99% – 13.49%||10 years||Not disclosed|
|MPower||Not disclosed||Up to 10 years||$2,001 – $50,000|
*This is a federal student loan
**4.53% for undergraduate and 6.08% for graduate or professional
Federal Student Loans for Bad Credit
Most federal student loans don’t take your credit score into account when determining eligibility. Instead, the government will simply see if you meet some basic requirements such as being a U.S. citizen or eligible non-citizen and being enrolled in an eligible school.
To determine eligibility, students need to complete the Free Application for Federal Student Aid (FAFSA).
Here are the federal student loans available to students with bad credit (click an option to learn more):
Direct Subsidized Loans
|Loan Type||Fixed APR|
|Direct Subsidized Loan||4.53%|
Direct Subsidized Loans are provided by the U.S. Department of Education and are only offered to undergraduate students. These are available to undergraduate students who demonstrate financial need.
For subsidized loans, the annual maximum borrowing limit ranges depending on grade level.
Direct Unsubsidized Loans
|Loan Type||Fixed APR|
|Graduate or Professional||6.08%|
The Direct Unsubsidized Loan is similar to the Direct Subsidized loan except that with the unsubsidized loan, the government does not pay the interest at any point and graduate students are eligible.
While interest rates for undergraduates remain the same, students are eligible to borrow more in unsubsidized loans. Limits range depending on grade level and dependency status.
Direct PLUS Loans
|Loan Type||Fixed APR|
PLUS Loans are more similar to private loans than other types of federal loans. These loans do require a credit check and they have higher interest rates and fees than other federal loans.
Even though there is a credit check for the Direct PLUS Loan, requirements can be less stringent than private loans. The government wants to make sure the applicant has no adverse credit history such as a bankruptcy or delinquencies over 90 days.
Private Student Loans for Bad Credit
After maxing out federal student loans and other financial aid, private student loans can be used to bridge the gap.
Private student loans do require a credit check and because most students haven’t established a credit history yet, most require a creditworthy cosigner.
Ascent, Funding U, and MPower specialize in offering student loans for bad credit. You can click a lender in the list below to learn more about their loans.
4.23% – 14.16%
5, 10, or 15 years
$2,000 – $200,000
Ascent offers loans for both undergraduate and graduate students. These loans are provided to both students with cosigners and those without.
Note: You can see other options for student loans without a cosigner here.
Eligibility for Ascent student loans is based not just on creditworthiness but also individual factors such as what the applicant is studying, which can indicate future earning potential.
The following are some details of Ascent student loans:
- Variable APRs range from 5.49% to 12.77%
- Fixed APRs range from 7.00% to 13.74%
- There are no application fees or origination fees
- Ascent offers a 1% cash-back graduation reward
>> Full Review: Ascent Student Loans Review
7.99% – 14.49%
Funding U is another company that specializes in providing education loans for bad credit or no credit.
Funding U bases loan decisions on how an applicant is progressing in school and their earning potential. It takes only two minutes to prequalify online at the Funding U website.
The following are some of the loan terms and specifics of student loans from FundingU:
- With AutoPay, the APR is 11.49%
- Loans close in around two to three days
- Students have to be pursuing a bachelor’s degree at a Title IV-eligible four-year college, and for-profit schools aren’t eligible
>> Full Review: Funding University Student Loans Review
Up to 10 years
$2,001 – $50,000
MPower is a financial institution providing loans for international students, DACA students, and also domestic students. Students can apply for a loan from MPower without having collateral, a credit score, or cosigners.
Details of MPower loans include the following:
- MPower offers loans to more than 190 nationalities including the United States
- Fixed interest rate loans range from $2,001 to $50,000
- MPower works with more than 200 schools
>> Full Review: MPower Student Loans Review
Are There Alternatives to Bad Credit Student Loans?
Students who are worried about the effects of bad credit on their ability to get student loans should also take the time to research grants and scholarships.
These forms of financial aid don’t have to be paid back since they are gift aid and there isn’t a credit check. Grants are typically need-based, while scholarships are most often merit-based (though they may be need-based as well).
If you have no credit history or bad credit, there are financial aid options available to you. It’s a good idea first to explore grants and scholarships that don’t have to be paid back.
Students should complete the FAFSA since most student loans provided by the federal government don’t require a credit check.
If a student does need private funding to cover gaps in the cost of education, the companies mentioned above provide student loans for no credit or bad credit.
Author: Ashley Sutphin
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