Bad Credit Private Student Loan

Q: What are the realistic chances for a student getting a bad credit private student loan? I received some money from FAFSA, but it’s not nearly enough to cover the cost of college, and my application for a private student loan has been denied. For students with bad credit, is there really a way to get a private student loan?

A: All college students, regardless of their credit standing, are encouraged to exhaust all federal financial aid (which can be accomplish by filing a FAFSA) and scholarship opportunities before considering private student loans. Federal financial aid and scholarships for college are not based upon a student’s credit. For students who have poor or little credit, obtaining a “bad credit private student loan” can be a difficult task. Private student loans are heavily based upon a borrowers credit; however, this does not mean that all students with bad credit cannot secure a private student loan.

A common option for students with bad credit that wish to increase their chances of securing a private student loan, would be to seek the help of a creditworthy cosigner. A cosigner with excellent credit may be able to help a borrower with bad credit secure the private student loan they need. Another option for students, which can be largely overlooked, is to make an appointment with the financial aid staff at their school. Students may have additional financing options they are unaware of, and the schools financial aid staff can help address the financial obstacles specific to each student’s situation.