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8 Student Loans for Bad Credit or No Credit

Anna HelhoskiSeptember 10, 2020

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Federal student loans should be your first choice for borrowing with no or bad credit. But if there’s still a cost gap to fill, consider private student loan options without credit score requirements.

If you need a student loan, but you have bad credit or no credit history, federal student loans are your best option. They don’t require a credit history to borrow and offer flexible repayment options.

But federal loans do have borrowing limits. To fill a gap in college costs, you may need to take out a private loan from a bank, credit union or online lender. Most private lenders require borrowers to have a credit score of 690 or above. If you don’t have credit or your credit history is thin, you have two options for private loans:

  • A private loan from one of the few lenders that don’t have credit or co-signer requirements, though you’ll pay higher interest rates.

  • A private loan with a co-signer who has good credit.

Here's more on how to shop for a student loan when you have bad or no credit:

  1. Start with federal student loans. Fill out the Free Application for Federal Student Aid, known as the FAFSA to apply for federal student loans as well as qualify for free aid such as grants, scholarships and work-study. They offer lower interest rates and come with income-driven repayment plans and forgiveness programs.

  2. Find a co-signer with good credit. To borrow private loans with a co-signer and get the most competitive interest rates, they’ll need to have a good credit score and steady income. If you opt for a co-signer, they’ll be responsible for your debt if you can’t repay it.

  3. If you can’t find a co-signer, consider loans you can get independently. Some lenders offer private student loans without factoring in credit scores. Future income potential is usually considered instead. The higher your earning potential, the more likely you are to get competitive rates.

  4. Compare loan features. When shopping for a private loan, compare offers to get the lowest interest rate you qualify for. Note whether the lender will postpone payments in case you have difficulty affording them, and for how long. That’s important. Find out if there are origination, prepayment or late fees, and how easily you can reach the lender by phone, email or live chat if you encounter a billing or customer service issue.

  5. Opt for a fixed interest rate. Given the choice, a fixed interest rate is a safer bet than a variable interest rate. It won’t increase over time.

  6. Keep an eye on the bottom line. Use a student loan calculator to see what kind of payment you’ll face after borrowing for multiple years.

  7. Consider refinancing in the future. Once you’re out of school and have built a credit profile, you may be able to refinance private student loans to a lower interest rate. You’ll generally need solid income, a credit score of 690 or higher and a history of on-time debt payments.

Here are our picks for student loans for bad or no credit, as well as how to shop for a loan if you have no credit.

Summary of Student Loans for Bad Credit or No Credit

Our pick for

Student loan for bad credit

Federal Subsidized/Unsubsidized Loan

Federal Subsidized/Unsubsidized Loan

Fixed APR

2.75 - 4.30%

Variable APR

N/A

Min. Credit Score

None


Variable APR

N/A

Key facts

Federal direct loans offer generous repayment flexibility and among the lowest fixed-interest rates you’ll find.

Pros

  • More flexible repayment options for struggling borrowers than other lenders.

  • Subsidized loans do not collect interest while in school or during deferment.

  • Lower interest rates compared with private lenders.

Cons

  • You pay an origination fee.

Qualifications

  • No credit check or minimum income is needed to borrow.

  • Loan amounts for undergraduates: $5,500 year one, $6,500 year two, $7,500 year three and thereafter, up to a total of $31,000

  • Independent students and graduate students have higher loan limits.

  • Undergraduate interest rate fixed at 4.53%, while grad students get higher 6.08% rate.

Available Term Lengths

10 to 25 years once repayment begins, depending on the repayment plan.

Disclaimer

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Our picks for

Private loans for no credit

Ascent Private Student Loan
Check Rate

on Ascent's website

Ascent Private Student Loan

Ascent Private Student Loan

Fixed APR

3.53 - 14.50%

Variable APR

2.69 - 12.98%

Min. Credit Score

680

Check Rate

on Ascent's website


Variable APR

2.69 - 12.98%

Key facts

Ascent offers a future income-based option that doesn't require a co-signer and evaluates your application based on factors like earning potential, major and attendance in school.

Pros

  • Forbearance of 24 months is longer than many lenders.

  • You can make biweekly payments via autopay.

  • For co-signed option, multiple in-school repayment options are available, including interest-only, flat-fee and deferred.

  • For non-co-signed future-income based option, no co-signer or credit history is required.

Cons

  • Non-co-signed future income-based option is available only to college juniors and seniors.

Qualifications

  • Typical credit score of approved borrowers or co-signers: Did not disclose for co-signed option. For non-co-signed future income-based option, Ascent emphasizes future earnings over income or credit score.

  • Minimum income: $24,000 for the co-signed and non-co-signed credit-based option. Income is not considered for the non-co-signed future income-based option.

  • Loan amounts: For co-signed option, $1,000 minimum to $200,000 over the lifetime of a borrower. The amount for each loan period cannot exceed the total cost of attendance. For non-co-signed option, $1,000 to $20,000.

  • Non-co-signed future income-based borrowers must also meet satisfactory academic performance requirements with a 2.9 GPA or higher.

Available Term Lengths

5, 7, 10, 12 or 15 years for cosigned option or 10 or 15 for non-co-signed option

Disclaimer

Ascent Student Loans are funded by Richland State Bank (RSB), Member FDIC. Loan products may not be available in certain jurisdictions. Certain restrictions, limitations; and terms and conditions may apply. For Ascent Terms and Conditions please visit: www.AscentStudentLoans.com/Ts&Cs. Rates are effective as of 10/01/2020 and reflect an automatic payment discount of either 0.25% (for credit-based loans) OR 2.00% (for undergraduate future income-based loans). Automatic Payment Discount is available if the borrower is enrolled in automatic payments from their personal checking account and the amount is successfully withdrawn from the authorized bank account each month. For Ascent rates and repayment examples please visit: AscentStudentLoans.com/Rates . 1% Cash Back Graduation Reward subject to terms and conditions. Click here for details. Cosigned Credit-Based Loan student borrowers must have a minimum credit score. The minimum score required is subject to change and may depend on the credit score of your cosigner.
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Funding U Private Student Loan
Check Rate

on Funding U's website

Funding U Private Student Loan

Funding U Private Student Loan

Fixed APR

7.99 - 14.99%

Variable APR

N/A

Min. Credit Score

None

Check Rate

on Funding U's website


Variable APR

N/A

Key facts

Best for high-achieving independent students enrolled in four-year programs who have small funding gaps.

Pros

  • You don't need a co-signer or credit history to get a loan.

  • You can see if you’ll qualify and what rate you’ll get without a hard credit check.

  • DACA students with a work-eligible Social Security number can qualify.

Cons

  • Loans aren't available in 22 states.

  • Payment required while in school and during the grace period.

  • Maximum funding amount is less than most lenders.

Qualifications

  • Typical credit score of approved borrowers: 650.

  • Minimum income: No minimum, but borrowers must demonstrate they can pay $20 per month toward their loan.

  • Loan amounts: $3,001 up to $10,000.

Available Term Lengths

10 years

Disclaimer

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A.M. Money Private Student Loan

A.M. Money Private Student Loan

Fixed APR

7.08 - 8.06%

Variable APR

N/A

Min. Credit Score

None


Variable APR

N/A

Key facts

Chicago Student Loans by A.M. Money is best for students who don’t have a co-signer, have a strong GPA and attend one of the schools A.M. Money works with. It is affiliated with Illinois, but lends to schools all over the country.

Pros

  • GPA is used to determine eligibility instead of credit or a co-signer.

  • Offers a hard-to-find, temporary income-based repayment option for up to 36 months.

  • All borrowers get the same fixed rate, benchmarked to the federal PLUS loan rates.

Cons

  • Works with a limited list of schools.

  • Charges an origination fee.

  • You can’t pay more than the minimum via autopay.

Qualifications

  • Typical credit score of approved borrowers: Credit and a co-signer are not required. Approval is based on GPA.

  • Minimum income: No minimum. Approval is based on GPA.

  • Loan amounts: $2,001 up to the full cost of attendance, maximum $50,000

Available Term Lengths

10 years

Disclaimer

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Our pick for

Private loans for international students with no credit

MPOWER Private Student Loan

MPOWER Private Student Loan

Fixed APR

7.52 - 13.63%

Variable APR

N/A

Min. Credit Score

N/A


Variable APR

N/A

Key facts

While MPOWER’s interest rates are relatively high, the lender offers a hard-to-find option: student loans for international students without requirements for a credit score or a co-signer.

Pros

  • Offers a hard-to-find option: non-co-signed student loans for international and DACA students.

  • Borrowers are assigned a dedicated student loan advisor.

  • Forbearance of 24 months is longer than many lenders offer, and borrowers can access national disaster forbearance as well.

Cons

  • Payment required while in school and during the grace period.

  • Offers only one repayment term: 10 years.

Qualifications

  • MPOWER considers future income potential but does not factor in credit scores.

  • Loan amounts: Minimum $2,001. Maximum loan is $50,000, limited to $25,000 per academic period.

Available Term Lengths

10 years

Disclaimer

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Our pick for

Health profession loans for graduate students

Ascent Graduate and Health Professions Student Loan
Check Rate

on Ascent's website

Ascent Graduate and Health Professions Student Loan

Ascent Graduate and Health Professions Student Loan

Fixed APR

4.56 - 13.42%

Variable APR

3.65 - 12.40%

Min. Credit Score

mid-500's

Check Rate

on Ascent's website


Variable APR

3.65 - 12.40%

Key facts

Ascent does not require a co-signer and evaluates your application based on factors like earning potential, major and attendance in school.

Pros

  • Forbearance of 24 months is longer than many lenders offer.

  • Grace period of 9 months is longer than many lenders offer.

  • You can see if you’ll qualify and what rate you’ll get without a hard credit check.

Cons

  • You must be enrolled at least half-time to qualify.

  • Fixed rate loan only offers 10-year repayment term.

Qualifications

  • Typical credit score of approved borrowers or co-signers: Not available.

  • Minimum income: Not available.

  • Loan amounts: up to $200,000.

Available Term Lengths

7, 10, 12 or 15 years

Disclaimer

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Our pick for

Income Share Agreement

Stride Funding Income Share Agreement
Check Rate

on Stride's website

Stride Funding Income Share Agreement

Stride Funding Income Share Agreement

Fixed APR

N/A

Variable APR

N/A

Min. Credit Score

None

Check Rate

on Stride's website


Variable APR

N/A

Key facts

Stride Funding offers income share agreements to students who are at least college juniors and typically major in health care and STEM fields.

Pros

  • Payments aren’t due if you’re unemployed.

  • Lending decisions are not based on your credit score.

  • You receive free career services, including job placement support.

Cons

  • There’s no discount for paying off your agreement early like some lenders offer.

  • Funding may not be available based on your school or major.

  • Not available in South Carolina.

Qualifications

  • Eligibility is based on factors like academic program and projected salary, not credit score.

  • Loan amounts: $3,000 to $25,000 annually; $50,000 lifetime maximum.

  • Payment cap: Two times the amount borrowed.

  • Income share percentages: Typically 6% to 9%; lifetime max is 20%.

Available Term Lengths

5 years, but can extend to up to 10 years.

Disclaimer

Read Full Review

Our pick for

Income Share Agreement for Nursing Students

Avenify Income Share Agreement

Avenify Income Share Agreement

Fixed APR

N/A

Variable APR

N/A

Min. Credit Score

None


Variable APR

N/A

Key facts

Avenify offers income share agreements to students pursuing nursing degrees who are within 12 months of graduation.

Pros

  • Periods of unemployment count toward your payment total.

  • Lending decisions are not based on your credit score.

  • You receive a discount for paying off your ISA early.

Cons

  • Funding is available only to nursing students.

  • Nursing certificate programs currently aren’t eligible.

  • You must be within 12 months of graduation to qualify.

Qualifications

  • Eligibility is based on factors like your GPA and potential cost of living, not credit score.

  • Loan amounts: $1,000 to $15,000.

  • Income share percentages: Typically range from 1.5% to 7.5%; average is 3.99%.

Available Term Lengths

5 years, but can extend to up to 10 years.

Disclaimer

Read Full Review

Student loan options for parents with bad credit

Parents with bad credit have fewer options for parent loans. You'll likely need a guarantor or a co-signer to qualify.

Federal PLUS loans require parent borrowers to not have adverse credit history — a negative mark on your credit history such as charged-off payments, default or bankruptcy.

If you PLUS loan application is denied you can try to get an endorser (similar to a co-signer) who can qualify for a parent PLUS loan. Or you can appeal the decision with the Department of Education by providing documentation of extenuating circumstances.

Your next best option is to look for private student loans for parents that allow you to have a co-signer.

Last updated on September 10, 2020

To recap our selections...

NerdWallet's Student Loans for Bad Credit or No Credit

Frequently asked questions

Further reading.