Is There Such A Thing As Bad Credit Student Loans?
The first few years I was away from home, I ruined my credit. Spending money that I didn't have was my big vice and there were times when I couldn't make my credit card payments. This obviously made life quite difficult when I tried to get loans. Banks saw me as a huge risk and wouldn't loan me money.
Since my credit score was in the 450 range, getting loans was also really tough. I couldn't even get a cell phone without putting down a deposit of over $400. Since I had been denied for other types of loans, I honestly believed that getting student loans was outside the realm of possibility for me.
My undergraduate studies were honestly quite a challenge for me. Mostly this was the case because I didn't think I could get loans. I would work for a while and then go to school for a while. Doing school this way takes a really long time. Now I know that I could have taken out student loans even though my credit was terrible.
The federal government has created the Stafford loan program which allows you to take out student loans regardless of your credit history. They guarantee the loans which takes away the risk from the institution that provides you with the loan.
If you think about the economics behind this program, it actually makes a lot of sense. If the government can increase your ability to earn, you will pay more taxes later in life. They may take a hit on some defaults now but will make more in the future. This is why they're willing to basically sign with you on your student loan.
Getting Stafford loans is pretty easy if you're a citizen of the United States. All you need to do is go into the financial aid office at your school to fill out a FAFSA. You will then be judged based on your need. If the school determines that you have need, you should be approved quite easily.
Stafford loans are almost always available to people as long as they haven't defaulted on a student loan in the past. Once you have a default, you are required to repay your previous loan before you can take out another.
Student loans would have helped me immensely while I was in college. I wasted tons of times trying to pay for school and in the end, it cost me a few years. Getting loans could have really sped up my process.
Since my credit score was in the 450 range, getting loans was also really tough. I couldn't even get a cell phone without putting down a deposit of over $400. Since I had been denied for other types of loans, I honestly believed that getting student loans was outside the realm of possibility for me.
My undergraduate studies were honestly quite a challenge for me. Mostly this was the case because I didn't think I could get loans. I would work for a while and then go to school for a while. Doing school this way takes a really long time. Now I know that I could have taken out student loans even though my credit was terrible.
The federal government has created the Stafford loan program which allows you to take out student loans regardless of your credit history. They guarantee the loans which takes away the risk from the institution that provides you with the loan.
If you think about the economics behind this program, it actually makes a lot of sense. If the government can increase your ability to earn, you will pay more taxes later in life. They may take a hit on some defaults now but will make more in the future. This is why they're willing to basically sign with you on your student loan.
Getting Stafford loans is pretty easy if you're a citizen of the United States. All you need to do is go into the financial aid office at your school to fill out a FAFSA. You will then be judged based on your need. If the school determines that you have need, you should be approved quite easily.
Stafford loans are almost always available to people as long as they haven't defaulted on a student loan in the past. Once you have a default, you are required to repay your previous loan before you can take out another.
Student loans would have helped me immensely while I was in college. I wasted tons of times trying to pay for school and in the end, it cost me a few years. Getting loans could have really sped up my process.
About the Author:
Dave helps educate people about guaranteed online personal loans and guaranteed student loans bad credit.
posted by Credit Counseling at
7:47 PM
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