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3 Student Loans for Bad or No Credit: Compare Options for 2020

Anna HelhoskiMay 11, 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 is bad (a score between 300 and 629), 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 are our picks for student loans for bad or no credit, as well as how to shop for a loan if you have bad or no credit.

Summary of Student Loans for Bad or No Credit: Compare Options for 2020

LenderNerdWallet Rating Fixed APRVariable APRMin. Credit ScoreLearn More
Federal Subsidized/Unsubsidized Loan

Federal Subsidized/Unsubsidized Loan

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Best for: Student loan for bad credit

4.53 - 6.08%

N/A

None

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Ascent Private Student Loan

Ascent Private Student Loan

Check Rate

on Ascent's website

Best for: Private loans for bad credit

3.98 - 14.92%

3.17 - 13.92%

540

Check Rate

on Ascent's website

MPOWER Private Student Loan

MPOWER Private Student Loan

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Best for: Private loans for bad credit

7.52 - 13.63%

N/A

N/A

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Federal Subsidized/Unsubsidized Loan
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Federal Subsidized/Unsubsidized Loan

Federal Subsidized/Unsubsidized Loan

Fixed APR

4.53 - 6.08%

Variable APR

N/A

Min. Credit Score

None

See my rates

on NerdWallet's secure website


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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Ascent Private Student Loan
Check Rate

on Ascent's website

Ascent Private Student Loan

Ascent Private Student Loan

Fixed APR

3.98 - 14.92%

Variable APR

3.17 - 13.92%

Min. Credit Score

540

Check Rate

on Ascent's website


Variable APR

3.17 - 13.92%

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

  • Fewer repayment term lengths than other lenders for fixed-rate loans.

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

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 2.5 GPA or higher.

Available Term Lengths

5, 10 or 15 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 05/14/2020 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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MPOWER Private Student Loan
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MPOWER Private Student Loan

MPOWER Private Student Loan

Fixed APR

7.52 - 13.63%

Variable APR

N/A

Min. Credit Score

N/A

See my rates

on NerdWallet's secure 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.

  • 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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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.

» COMPARE: Private student loans you can get with a co-signer

Last updated on May 11, 2020

To recap our selections...

NerdWallet's Student Loans for Bad or No Credit: Compare Options for 2020

Frequently asked questions

Most federal student loans don’t require a credit history, making them your best option if you have poor credit. Most private options require good credit or a co-signer with good credit.

Federal student loans don't have a minimum credit score. If you need a private student loan after exhausting federal aid, you’ll typically need a FICO score above 690 to qualify.

If you have poor credit, you’ll likely need a co-signer to qualify for a private student loan. A few lenders offer loans without credit or co-signer requirements — but their interest rates are higher.

There’s no credit check for federal undergraduate student loans. While some private lenders don’t require a specific credit score, they may still check for negative credit history like loan defaults.