BEST OF

8 Student Loans for Bad Credit or No Credit

There are student loans available for borrowers with bad or no credit. But not everyone will qualify. Check lender to requirements to see about your situation.

By Cecilia Clark 

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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 student 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 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.

Student Loans for Bad Credit or No Credit

Our pick for

Student loan for bad credit

Federal Subsidized/Unsubsidized Loan

5.0

NerdWallet rating 
Federal Subsidized/Unsubsidized Loan

Min. credit score

None

Fixed APR

4.99-6.54%

Variable APR

N/A

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 3.73%, while grad students get higher 5.28% rate

Available Term Lengths

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

Read Full Review

Our pick for

Private loans for bad credit

College Ave Private Student Loan
Check rate

on College Ave's website

College Ave Private Student Loan

5.0

NerdWallet rating 
College Ave Private Student Loan

Min. credit score

Mid-600s

Fixed APR

3.99-14.96%

Variable APR

3.99-14.86%
Check rate

on College Ave's website


Variable APR

3.99-14.86%

Key facts

Best for students who want to make payments while they're still in school.

Pros

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

  • More flexible repayment options than other lenders.

  • Six-month grace period extension is available.

Cons

  • You must be at least halfway through your repayment term before you can request a co-signer release.

Qualifications

  • Typical credit score of approved borrowers: Mid-700s.

  • Minimum income: $35,000 per year.

  • Loan amounts: $1,000 up to cost of attendance.

Available Term Lengths

5, 8, 10 or 15 years

Disclaimer

College Ave Student Loans products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or M.Y. Safra Bank, FSB, member FDIC.. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply. As certified by your school and less any other financial aid you might receive. Minimum $1,000. Rates shown are for the College Ave Undergraduate Loan product and include autopay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation. This informational repayment example uses typical loan terms for a freshman borrower who selects the Flat Repayment Option with an 8-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 7.78% fixed Annual Percentage Rate (“APR”): 54 monthly payments of $25 while in school, followed by 96 monthly payments of $176.21 while in the repayment period, for a total amount of payments of $18,266.38. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary. This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 8.35% fixed Annual Percentage Rate (“APR”): 120 monthly payments of $179.18 while in the repayment period, for a total amount of payments of $21,501.54. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary. Information advertised valid as of 12/21/2022. Variable interest rates may increase after consummation. Approved interest rate will depend on the creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of full principal and interest payments with the shortest available loan term.

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ISL Private Student Loan

5.0

NerdWallet rating 
ISL Private Student Loan

Min. credit score

670

Fixed APR

3.85-7.91%

Variable APR

4.44-8.89%

Variable APR

4.44-8.89%

Key facts

Best for low-interest loans with consumer-friendly features, like a generous forbearance policy.

Pros

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

  • No late fees.

Cons

  • Only offers 2 loan terms.

Qualifications

  • Typical credit score of approved borrowers or co-signers: 670.

  • Minimum income: No minimum income.

  • Loan amounts: $1,001 or $2,001, based on residency and school location, up to cost of attendance minus other aid received.

Available Term Lengths

10 or 15

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Our pick for

Private loans for no credit

Ascent Independent Student Loan
Check rate

on Ascent's website

Ascent Independent Student Loan

5.0

NerdWallet rating 
Ascent Independent Student Loan

Min. credit score

Varies

Fixed APR

9.83-16.43%

Variable APR

9.05-15.32%
Check rate

on Ascent's website


Variable APR

9.05-15.32%

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

  • Among the best for payment flexibility.

  • Grace period of 9 months is longer than most lenders.

Cons

  • International students are not eligible.

  • Freshmen, sophomores and those enrolled less than half-time are not eligible for future-income based loan.

Qualifications

  • Typical credit score of approved borrowers: Did not disclose.

  • Minimum income: $24,000 per year for credit-based loan. No minimum for future-income based loan.

  • Loan amounts: $2,001 to $200,000 per year with an aggregate loan limit of $200,000 for credit-based loan. $2,001 to $20,000 per year for future-income based loan.

Available Term Lengths

5, 7, 10, 12 or 15 years

Disclaimer

Ascent Student Loans are funded by Bank of Lake Mills, 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.AscentFunding.com/Ts&Cs. Rates are effective as of 1/1/2023 and reflect an automatic payment discount of either 0.25% (for credit-based loans) OR 1.00% (for undergraduate outcomes-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: AscentFunding.com/Rates. 1% Cash Back Graduation Reward subject to terms and conditions. Cosigned Credit-Based Loan student must meet certain minimum credit criteria. The minimum score required is subject to change and may depend on the credit score of your cosigner. Lowest APRs require interest-only payments, the shortest loan term, and a cosigner, and are only available to our most creditworthy applicants and cosigners with the highest average credit scores.

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Funding U Private Student Loan
Check rate

on Funding U's website

Funding U Private Student Loan

4.5

NerdWallet rating 
Funding U Private Student Loan

Min. credit score

None

Fixed APR

7.49-12.99%

Variable APR

N/A
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.

Cons

  • Loans aren't available in 14 states.

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

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

Read Full Review

A.M. Money Private Student Loan

4.5

NerdWallet rating 
A.M. Money Private Student Loan

Min. credit score

None

Fixed APR

7.53-8.85%

Variable APR

N/A

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.

  • Does not allow for bi-weekly payments 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

Read Full Review

Our pick for

Private loans for international students with no credit

MPOWER Private Student Loan
Check rate

on MPOWER's website

MPOWER Private Student Loan

4.0

NerdWallet rating 
MPOWER Private Student Loan

Min. credit score

N/A

Fixed APR

13.72-15.01%

Variable APR

N/A
Check rate

on MPOWER's website


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.

  • Borrowers can request forbearance of up to 24 months, which is longer than many lenders offer.

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 $100,000, limited to $25,000 per academic period.

Available Term Lengths

10 years

Disclaimer

Note: Our loan does not support Canadian citizens studying in Canada. Canadian Permanent Residents and U.S. citizens are considered “international” when studying in Canada. International students, U.S. citizens, U.S. permanent residents, and DACA recipients in the U.S. or Canada. ‘International’ means you are a non-U.S. citizen or U.S. non-permanent resident studying at a university in the U.S., or you are a non-Canadian citizen or Canadian non-permanent resident studying at a university in Canada. ‘DACA’ means the Deferred Action For Childhood Arrivals Program initiated by the U.S. Department of Homeland Security in 2012. In order to qualify as a DACA Student, you must have applied for, and been granted, DACA status by USCIS. As a graduate student, you can borrow with a fixed interest rate of 12.99% (13.98% APR¹). This is the maximum rate and will not increase. However, MPOWER offers borrowers a way to qualify for a discount; a 0.25% rate discount is possible by making your loan payments through automatic withdrawal from your bank account. If you qualify for this discount, your rate will be 12.74% (13.72% APR²). ¹[International graduate student with regular interest rate] The APR is calculated using the following assumptions: A loan is approved in the amount of US$10,000 with a 5% origination fee of US$500. The student will start making payments 45 days after loan disbursement. Payments will be interest only until graduation, plus an additional 6-month grace period. The remaining months of repayment are calculated using a 120-month amortization schedule. All payments are made on-time, a forbearance is never utilized, and there is no pre-payment of any principal. At an APR of 13.98%, the monthly payment amount is US$113.66 for the first 30 months. For the next 120 months, the monthly payment amount is about $156.71. ²[International graduate student with discounted interest rate] The APRs with discounts are calculated using the following assumptions: A loan is approved in the amount of $10,000 with a 5% origination fee of US$500. The student will start making payments 45 days after loan disbursement. The borrower signs up for automatic debit immediately after the loan is disbursed and remains on it for the life of the loan, which reduces the rate by 0.25%. At an APR of 13.72%, the monthly payment is US$111.47 for the first 30 months. For the last 120 payments, the monthly amount is US$155.17. Undergraduate Students in the U.S. or Canada Note: Our loan does not support Canadian citizens studying in Canada. Canadian Permanent Residents and U.S. citizens are considered “international” when studying in Canada. International students, U.S. citizens, U.S. permanent residents, and DACA recipients in the U.S. or Canada. ‘International’ means you are a non-U.S. citizen or U.S. non-permanent resident studying at a university in the U.S., or you are a non-Canadian citizen or Canadian non-permanent resident studying at a university in Canada. ‘DACA’ means the Deferred Action For Childhood Arrivals Program initiated by the U.S. Department of Homeland Security in 2012. In order to qualify as a DACA Student, you must have applied for, and been granted, DACA status by USCIS. As an undergraduate student, you can borrow with a fixed interest rate of 13.99% (15.01% APR³). This is the maximum rate and will never increase. However, MPOWER offers borrowers a way to qualify for a discount; a 0.25% rate discount is possible by making your loan payments through automatic withdrawal from your bank account. If you qualify for this discount, your rate will be 13.74% (14.75% APR⁴). ³[International undergraduate student with regular interest rate] The APR is calculated using the following assumptions: A loan is approved in the amount of $10,000 with a 5% origination fee of $500. The student will start making payments 45 days after loan disbursement. Payments will be interest only until graduation plus an additional 6-month grace period. The remaining months of repayment are calculated using a 120-month amortization schedule. All payments are made on-time, a forbearance is never utilized, and there is no pre-payment of any principal. At an APR of 15.01%, the monthly payment amount is $122.41 for the first 30 months. For the next 120 months, the monthly payment amount is $162.97. ⁴[International undergraduate student with discounted interest rate] The APRs with discounts are calculated using the following assumptions: A loan is approved in the amount of US$10,000 with a 5% origination fee of US$500. The student will start making payments 45 days after loan disbursement. The borrower signs up for automatic debit immediately after the loan is disbursed and remains on it for the life of the loan, which reduces the rate by 0.25%. A forbearance is never utilized and there is no prepayment of any principal. At an APR of 14.75%, the monthly payment is US$120.22 for the first 30 payments. For the last 120 payments, the monthly amount is US$161.39.

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Our pick for

Income-based private student loan

Edly Private Student Loan

4.0

NerdWallet rating 
Edly Private Student Loan

Min. credit score

None

Fixed APR

N/A

Variable APR

N/A

Variable APR

N/A

Key facts

Best for upperclassmen and graudate students with no co-signer or credit history.

Pros

  • No credit history required.

  • Available to students without a co-signer.

  • No payment required if borrower's income is less than $30,000 per year.

Cons

  • Borrowers have to repay 2.25X the borrowed amount if they want to pay off the loan early.

  • Not available to freshmen and sophomores receiving a four-year degree.

  • Not available to borrowers in Colorado, Maine, Vermont and West Virginia.

Available Term Lengths

5 years of payments and up to 10 years with deferment periods.

Read Full Review

Current student loan interest rates for bad credit and no-credit borrowers

The NerdWallet team of student loans experts analyzed reported rates from seven lenders who offer student loans to borrowers with bad credit or no credit. The analysis covers a period of 39 months. We did not consider lenders whose interest rate is tied to an income share agreement percentage. We did, however, consider lenders with and without minimum credit requirements.

Our analysis included four variables — average maximum fixed rates, average minimum fixed rates, average maximum variable rates and average minimum variable rates — for each lender on a month-over-month basis.

Not all lenders included offer variable rates.

The average rates as of Jan. 11, 2023, are:

  • Minimum fixed interest rate - 7.27%.

  • Maximum fixed interest rate - 15.01%.

  • Minimum variable interest rate - 6.12%.

  • Maximum variable interest rate - 13.81%.

Niche-lender rates — such as those specializing in bad and no-credit borrowers — tend to follow the trend line of private student loan origination interest rates in general. Average rates showed larger increases over the past month. The reported rates represent lenders' advertised ranges.

In some cases, you may be better off with an income share agreement-type student loan. Instead of paying a predetermined interest rate on your borrowed balance, you will repay your loan based on an agreed upon percentage of your post-graduation income.

Make sure to weigh the risks before deciding on this type of loan.

Rates on loans designed for independent students, who may not have established credit, are typically higher than rates on credit-based loans.

Consider multiple lenders, your offered rates and the terms and conditions around repayment before you commit. Adding a creditworthy co-signer to an application for a credit-based loan could improve your offer.

Use this chart to gauge how your student loan offers measure against typical interest rate ranges.

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 your 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.

STUDENT LOAN RATINGS METHODOLOGY

Our survey of more than 29 banks, credit unions and online lenders offering student loans and student loan refinancing includes the top 10 lenders by market share and top 10 lenders by online search volume, as well as lenders that serve specialty or nontraditional markets.

We consider 40 features and data points for each financial institution. Depending on the category, these include the availability of biweekly payments through autopay, minimum credit score and income requirement disclosures, availability to borrowers in all states, extended grace periods and in-house customer service.

The stars represent ratings from poor (one star) to excellent (five stars). Ratings are rounded to the nearest half-star.

Last updated on January 11, 2023

To recap our selections...

NerdWallet's Student Loans for Bad Credit or No Credit

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