Bad credit education loanstudent
Bad credit student education loans are those loans that are provided to student s suffering from bad credit for meeting various types of expenses related to education. In countries like United States, credit history of a person plays a very important role in determining the terms and conditions of loan and education loans are no exception. However, presence of many bad credit student education loan lenders makes it quite easy for a student to get his requirements fulfilled.
No doubt, a student may have to compromise with higher interest rates or repayment terms or even has to provide some collateral or any co-signor etc, but bad credit student education loans are available. Government student loans are considered as important for student suffering from bad credit because these loans are provided without checking the credit history of a student. Also, interest rate applied on bad credit student education loan is lower as compared to other private student loans. Let us discuss various types of government bad credit student education loans available in U.S next.
Government bad credit student loans
Various types of government bad credit student education loans in United States are Stafford loans, Perkins loans and other alternative non-credit based loans. Stafford loans are provided as subsidized as well as unsubsidized loans. In subsidized Stafford loans, a student gets the amount as per his requirement and government pays interest on his behalf. In case of unsubsidized Stafford loans, student receives the money and also repays the interest debited in the loan account. It has been observed that amount of loan granted under Stafford loans is generally small and is not able to fulfill all the requirements of a student. Other government bad credit student education loan available in United States is Perkins loan.
Under this loan program, a student is able to get the loan amount from $1000-$4000 per year and in whole, the loan amount does not exceed $20000. This loan is provided as a subsidized Stafford loan where government repays the interest on behalf of a student. Perkins loans are generally provided to student s suffering from bad credit. Other option available for student suffering from bad credit in United States is non credit based alternative loans. Under these loans, disabled student s are provided with financial support. Nursing student s are also eligible to get these loans. Similarly, student s who are in degree courses in science health are also eligible to get these loans. These loans are looked after by various departments of federal government. For nursing student s, maximum loan amount has been capped at $4000.
All above types of loans mentioned above are very important for student s suffering from bad credit. This is because student s are not only able to fulfill their requirements but also able to improve their credit history over a period of time. If a student approaches any private lending institution, he is required to pay higher rates. Also, it is not necessary that he shall be able to get these loans. Another benefit of going for the government bad credit student education loans is that if a student is not able to make payments due to one reason or the other, government undertakes certain programs for restructuring the terms and conditions of student loans. Apart from bad credit loans, a student can also opt for grants or scholarships provided by colleges as well as private institutions. However, a student is required to pass certain exams for becoming eligible.
Other aspects
There are some related aspects of bad credit student education loans that must be understood here. First of all, no credit checks are made while providing Stafford loans because of the fact that government assumes that most of applicants shall be joining college straight after high school and thus, would not have any credit rating. Same is the case with Perkins loans. However, if a student has already defaulted with respect to federal student loans in past, he may face some problems.
If a student is having bad credit but his parents are having good credit reports, bad credit student education loans can be obtained. For example, Plus loans are taken by parents rather than student. Plus loans are provided up to that amount which government thinks is essential for covering the costs attached with college education. All federal student loans are administered by U.S Department of education.
Subsidized Stafford loans are provided to financially needy student s whereas a student can get unsubsidized Stafford loan irrespective of his need. As said above also, it is really very difficult to fulfill all the requirements through Stafford loans only. One advantage attached with Stafford loans is that a student can reapply for loan amount at every school year. Perkins loans are provided to undergraduate as well as graduate student s.
Disadvantaged student Program is sponsored by the Department of Health and Human Services. Under this program, amount is provided as a non-credit based, low interest loan.
Credit counseling is also one process through which student s suffering from bad credit are able to fulfill their needs in the perfect manner. credit counseling is offered by many lending institutions in United States. For example, Sallie Mae is one such institution.
In some cases, especially when a student is finding private bad credit student education loan lender, by providing co-signor with good credit, a student is able to get the desired loan amount. It is important to understand here that private student loans are provided as credit based loans and thus, student suffering from bad credit have to fulfill many requirements for being eligible for these loans. Co-signor selected must be a trustworthy person who can sign the promissory note for the student. Similarly, providing collateral can also work in favor of a student.
It is advised here that before approaching any lender for getting bad credit student education loan, a student should decided about his actual requirements and whether these can be fulfilled by grants, scholarships etc or not.
