Student Loans for People with Bad Credit

There are few student loan options for people with bad credit. All lenders, even the federal government, are reluctant to give you a large loan if you have bad credit. Lenders do not want to lose their investment, so you must show the lender you can repay and will do so on time. Strive to overcome your negative credit score by strengthening your application in other areas.


Your credit score indicates how responsible you have been as a borrower. It is determined based on your repayment history, the total amount of debts you have, the types of debts you have and the length of your credit history. Small things can impact the score, like when a lender does a check into your credit, but these impacts are minimal. Before you apply for a new loan, try to increase your score in the major areas. Pay down a large amount of your debt, and make your payments on time for at least one year.


You cannot fix your credit score overnight. With this in mind, explore options for student loan borrowers with bad credit. Many borrowers mistakenly think the federal government will make bad credit loans. The government may be willing to help if you have a low income, but it cannot extend loans to bad credit borrowers. If you fail to repay the debt, it is the American taxpayer who takes a loss. Therefore, you may need to pursue private loans if you have bad credit.

The only exception the government may make is if your credit score is low due to your military service. The government aims to extend loans to people who are responsible, even if their credit score has suffered due to factors entirely outside of their control. If this is the only reason you have a low score, you may be able to secure a government loan.


Whether you decide to apply for a government loan or a private loan, you will need to submit an application showing you are worthy of the loan. Here is your best chance to get a loan, despite your bad credit. Use these techniques to strengthen your application and get a student loan:

  • Mitigate negative credit scores - You can submit supplemental materials explaining why your credit score is low. For example, maybe you took a credit card when you were very young. Since then, you have been very responsible and are working to pay off the debt. Write a letter about this, and give the facts showing you have been very responsible in the recent past.
  • Use a cosigner - Don't be afraid to ask your parents or a family member for help. A number of student borrowers use cosigners to get their loans. Once you graduate, you can refinance your debt to remove the cosigner.
  • Secure the loan - If you have collateral, this is a good time to use it. Risking your assets is unwise for a frivolous debt; but, using an asset like a car or home to pay for a college education can open up new options.

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