Private Bad Credit Student Loans

The government isn’t the only entity that makes student loans; there are private lenders that make student loans even to people with bad credit.

Most student loans in the United States; such as Stafford Loans, are made through the federal government. Federal student loans are easier to get because there are usually no income requirements on student loans. The federal student loans also have a longer repayment period than private loans.

To qualify for a private student loan a person will have to prove that they have the income to pay off the loan. It may be possible for a person with bad credit who is studying for a job in a high income profession to get a private student loan.

Advantages to private student loans

There are some advantages to getting a private student loan. The main advantage to private student loans is that they can be discharged through bankruptcy. Government student loans can’t be discharged through bankruptcy.

Another advantage to private student loans is that they can’t affect your tax return. The federal government will take unpaid student loan amounts out of tax refunds. A person may also end up paying a spouse’s student loans if a couple files a joint tax return.

There may also be fewer restrictions on how you can use private student loans. Some government student loans can’t be used for non educational purposes like room and board or food. Private student loan maybe available to help you pay day to day expenses while you’re in school.

Disadvantages to private student loans

A big disadvantage to private student loans is that a person may not be able to qualify for federal Pell Grants; which don’t have to be paid back. Students with private loans may also not be eligible for scholarships, state aid or financial aid programs offered by the college.

Another disadvantage is that a person’s credit rating maybe affected by private student loans. If a person can’t pay back a student loan or makes late payments it can lower their credit rating. Applying for a loan can also lower a credit rating.

Where to find private student loans

There are a number of excellent sources of private student loans for people with bad credit available. The best source of student loans is your school’s financial aid office. The financial aid office should have a number of private student loan options available. One great advantage to the school’s financial office is that it may be to tell you about scholarships, grants and other sources of school funding you don’t have to pay back. The financial aid office may also be able to help you compare private and government student loans to decide which one is best for you.

A wide variety of private student loans for people with bad credit is also available online. There are online lenders that specialize in student loans for people with bad credit. These lenders maybe willing to work with those who have been turned down by their school financial aid office.