The first time you applied for a student loan with bad credit, you had no idea what you were doing. Instead, the process seemed mysterious and intimidating: Should you apply online or in person? What kind of documentation do you need? Is there any way to improve your chances of getting approved for a loan? Now that it’s been years since then and even more years since you graduated from college, most of those questions have become easier to answer. But one thing has stayed the same: Many people still face challenges when applying for student loans with bad credit. In this blog post, you’ll walk through five steps to learn how to apply for student loan with bad credit easily:
Determine what kind of loans you need
The first step to applying for a student loan with bad credit is determining what kind of loans you need. There are many different types of student loans, each with its pros and cons. You should know the difference between federal and private loans and subsidized versus unsubsidized ones.
Find lenders who specialize in bad credit loans
Now that you have a general idea of what to look for in a lender, it’s time to get specific. For example, Lantern by SoFi experts says, “Some lenders will accept a lower score of credit than others.”
You can search for lenders who offer student loans with bad credit by visiting the websites of major banks, credit unions and other financial institutions. Most lenders will provide information about their loan programs on their websites, so check there first before calling or emailing them if you want more details about your options.
Have your documents ready
You’ll need to have your documents ready to get a student loan with bad credit. This includes ensuring you have all the required documents and asking for them in advance so that they are waiting for you when it comes time to apply for your loan.
Apply with a cosigner, if possible
If you have a cosigner, they’ll be responsible for the loan if you don’t make payments. This can help you get approved even with bad credit, but it also means they’ll need to pay off the debt if something goes wrong.
- Private loans: Many private lenders require cosigners when someone applies for a student loan with bad credit, especially if they’ve already been denied by one or more federal programs (such as the Federal Parent PLUS program).
- Federal loans: Federal student loans don’t require cosigners unless you’re under 18 years old or have no credit history (in which case no bank will give you any loan).
Check the status of your application
Check the status of your application online. You can do this by logging into your account and checking the status of loans that have been processed or by searching for the name of a lender and typing in “status.”
If you need to call, be sure to ask if there are any issues with your application before proceeding with another lender’s application process.
Congratulations if you receive confirmation that an agency has approved your loan!
You’re ready to repay those debts with payments scheduled according to each lender’s terms and conditions.
Many options are available if you need help with your student loan application. For example, you can find lenders specializing in bad credit loans and apply with a cosigner. If you need a different option, consider applying for an alternative loan, like a personal loan or credit card, until your credit improves.