When it comes to paying for college, a less-than-stellar credit score doesn’t have to slam the door on your dreams of higher education. Whether you’re working with a credit score that’s seen better days or you’re just starting to build your credit history, there are student loan options out there, like Ascent and A.M. Money, that can help you get the education you want. Let’s explore some of the best student loans for bad credit and how you can fund your future without stressing over your score.
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8 Best student loans for bad credit
When it comes to finding the best student loans for bad credit, it’s all about knowing where to look and what to expect. Here are some top options to consider:
1. Best for federal assistance: Federal subsidized or unsubsidized loan
Federal student loans are often the go-to option for students with bad credit. The best part? They don’t require a credit check, so your credit score is a nonissue. The government backs these loans and offers lower interest rates, flexible repayment options and a range of deferment or forgiveness programs.
Minimum credit score: None** Fixed APR: 6.53% for the 2024–2025 school year Variable APR: Not applicable Minimum loan amount: None **Maximum loan amount: Varies by year and dependency status
Pros:• No credit check required• Lower interest rates than private loans• Flexible repayment options | Cons:• Loan limits may not cover all expenses• Requires completion of the FAFSA• Interest accrues on unsubsidized loans while in school |
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2. Best for non-cosigned loans: Ascent non-cosigned student loan
Ascent offers a unique option for students who don’t have a cosigner. This loan program looks beyond your credit score. It considers other factors like your school, program and future income potential, making it a viable option for students with limited or poor credit.
Minimum credit score: None Fixed APR: 8.65% – 15.00% Variable APR: 9.15% – 15.40% Minimum loan amount: $2,001 Maximum loan amount: $20,000
Pros:• No cosigner required• Considers future income potential• Offers a 1% cashback graduation reward | Cons:• Higher interest rates than federal loans• Limited loan amount• Requires a minimum GPA for eligibility |
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3. Best for private student loans: A.M. Money private student loan
A.M. Money specializes in providing loans to students based on their academic performance rather than credit history. If you’ve got the grades but lack the credit score, this loan might be just what you need to cover your tuition costs.
Minimum credit score: None Fixed APR: 7.95% Variable APR: Not available Minimum loan amount: Not available Maximum loan amount: $50,000
Pros:• No credit check required• Based on academic performance• Flexible repayment terms | Cons:• Higher interest rates than federal loans• Requires strong academic performance• Limited to students at select schools |
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4. Best for income-share agreements: Edly
Edly offers an innovative approach to funding your education through income-share agreements (ISAs). Instead of traditional loans, you agree to pay a percentage of your income after graduation for a set period, making it a great option for students concerned about taking on debt.
Minimum credit score: None Fixed APR: Not applicable Variable APR: 9.40% – 23% Minimum loan amount: $5,000 Maximum loan amount: $20,000
Pros:• No upfront payments required• Payments based on income• No traditional interest rates | Cons:• Potentially higher long-term costs• Limited availability• Requires careful consideration of payment terms |
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5. Best for flexible repayment plans: College Ave student loans
College Ave offers private student loans designed with flexibility in mind, providing various repayment options and terms to fit your budget, even if your credit isn’t perfect. Whether you prefer making interest-only payments while in school, deferring all payments until after graduation or choosing a fixed monthly payment, College Ave has options to suit different financial situations.
To qualify, you don’t need a credit score, but adding a cosigner will require them to have a credit score in the mid-600s. The application process is straightforward, with a quick online prequalification that doesn’t impact your credit score, allowing you to explore your options before committing.
Minimum credit score: Not applicable
Fixed APR: 3.74% -17.99%
Variable APR: 5.59% – 17.99%
Minimum loan amount: $1,000
Maximum loan amount: Varies
Pros:• Multiple repayment options• Flexible loan terms• No fees for early repayment | Cons:• Requires a cosigner for the best rates• Interest rates vary based on creditworthiness• May require a higher credit score for approval |
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6. Best for refinancing: Education Loan Finance (ELFI)
ELFI is a solid choice for borrowers aiming to refinance their existing student loans, especially if they initially took out loans with less-than-ideal credit. ELFI stands out with competitive interest rates and flexible repayment terms, making it easier to find a plan that fits your financial situation.
Minimum credit score: 680 Fixed APR: 3.98% Variable APR: 6% Minimum loan amount: $1,000 Maximum loan amount: The amount approved by the school for qualified education expenses for the requested academic period
Pros:• Low refinancing rates• Flexible loan terms (5-20 years)• Co-signer release available after 12 months | Cons:• High credit score requirement• No deferment or forbearance options• Longer approval process |
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7. Best for merit-based loans: Funding U private student loan
Funding U offers a unique approach by focusing on academic merit and potential rather than credit history. This makes it an ideal option for students who excel academically but may not have a strong credit score or a cosigner. Funding U evaluates your application based on factors such as your GPA, progress toward your degree and the rigor of your coursework rather than your financial background.
You must be a full-time student pursuing a bachelor’s degree at an eligible four-year college to qualify. They also require that you’re on track to graduate within six years of starting college and have a solid academic standing.
Minimum credit score: None Fixed APR: 8.49% – 13.99% Variable APR: Not available Minimum loan amount: $3,001 Maximum loan amount: $20,000 per year
Pros: • No credit or cosigner required• Based on academic performance• Simple online application | Cons:• High-interest rates• Limited loan amounts• Repayment starts after graduation |
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8. Best for international students: MPower
MPOWER is a standout option for international students and DACA recipients who often face challenges securing traditional student loans. Unlike many private lenders, MPOWER doesn’t require a cosigner or a U.S. credit history, making it accessible to those who might otherwise struggle to find financing. They evaluate your application based on your future earning potential, academic performance and career path rather than your credit score.
To qualify, you’ll need to be enrolled in a degree-granting program at one of MPOWER’s partner schools, which are located in the U.S. or Canada. You must be within two years of completing your degree or starting a one- or two-year program. MPOWER also offers various career services and interest rate discounts to help you succeed during and after your studies.
Minimum credit score: None Fixed APR: 12.74% – 13.98% Variable APR: Not available Minimum loan amount: $2,001 Maximum loan amount: $100,000 total
Pros:• No cosigner or U.S. credit history needed• Available to international and DACA students• Interest rate discounts available | Cons:• High fixed interest rates• Limited loan amounts• Repayment starts immediately after graduation |
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Can I get a student loan with bad credit?
Yes, getting a student loan is possible even if your credit score isn’t in tiptop shape. Federal student loans don’t require a credit check, making them an accessible option for students with bad credit. For private loans, options like income-based repayment, non-cosigned loans and merit-based loans cater to those with less-than-ideal credit. You might face higher interest rates or need a cosigner, but financing your education is within reach with the right approach.
Types of bad credit student loans
Navigating the student loan landscape can be tricky, especially if your credit score hangs out in the “meh” zone. But don’t worry – here’s a breakdown of the types of student loans available for those with bad credit.
Federal student loans
Federal student loans are the go-to option for students with bad credit. The government funds these loans and doesn’t require a credit check, making them accessible to nearly all students.
How to get a federal student loan
Fill out the FAFSA (Free Application for Federal Student Aid).
Review your Student Aid Report (SAR) for accuracy.
Receive your financial aid award letter from your school.
Accept the federal student loans you’ve been offered.
Complete entrance counseling and sign your Master Promissory Note (MPN).
Pros
No credit check required: Accessible to students regardless of their credit history, making it easier to qualify.
Flexible repayment options: Offers various plans that can adjust based on your income and financial situation.
Potential for loan forgiveness: Certain federal loans may qualify for forgiveness programs, reducing the total amount you have to repay.
Cons
Borrowing limits may not cover full tuition: Federal loans have caps that might not fully fund your education costs.
Interest accrues on unsubsidized loans during school: Unsubsidized loans accumulate interest while you’re in school, increasing the total cost.
Must complete the FAFSA annually: Requires filling out the FAFSA each year to maintain eligibility and receive aid.
Private student loans
Private student loans are offered by banks, credit unions and online lenders. Unlike federal loans, these often require a credit check, so securing one with bad credit can be tougher but not impossible.
How to get a private student loan
Research and compare lenders.
Check prequalification offers to gauge your potential interest rates.
Apply online through the lender’s website.
Provide necessary documentation (ID, proof of income, etc.).
Review and sign your loan agreement.
Pros
Higher borrowing limits: Allows you to borrow more to cover the full cost of your education, including tuition, books and living expenses.
Can cover the full cost of attendance: Private loans often cover expenses that federal loans may not fully address, such as housing and additional fees.
Potential for lower interest rates with a cosigner: Adding a creditworthy cosigner can help you secure a lower interest rate, reducing the overall cost of the loan.
Cons
Requires credit check: Most private loans require a credit check, which can be a hurdle if your credit score is low or nonexistent.
Interest rates are typically higher than federal loans: Private loans often have higher interest rates, especially if you don’t have a cosigner or strong credit.
Fewer repayment and forgiveness options: Unlike federal loans, private loans offer limited repayment plans and generally don’t offer loan forgiveness.
Finding the right loan despite bad credit
Navigating the world of student loans can feel like walking a tightrope, especially when your credit score is working against you. But with federal loans, non-cosigned options and income-driven repayment plans, you don’t have to let bad credit hinder your education. Take the time to explore your options, weigh the pros and cons and choose the loan that fits your financial situation and long-term goals. With the right loan, your education dreams are well within reach.
FAQ
What is the lowest credit score for student loans?
Federal student loans don’t require a credit check, making them accessible to students with any credit score.
How does refinancing a student loan with bad credit work?
Refinancing with bad credit typically requires a cosigner or proof of stable income and may result in higher interest rates, but it can still lower your overall monthly payments.
What is the minimum payment for student loans?
The minimum payment depends on your loan type and repayment plan, but for federal loans, it can be as low as $50 per month under income-driven plans.
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