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Building a healthy credit history can take years of dedication and good financial management — something the typical college student may not have under their belts.
Since the average student enters college in their late teens, they typically do not yet have a credit score or significant financial history. Depending on the type of loan, it is still possible for them to borrow money for their education.
Learn how to take out a student loan without a co-signer or credit check, and how to get the education funding you need if you have a limited credit history.
You can also consider a private student loan. Believable lets you Compare interest rates on private student loans from multiple lenders, all in one place.
1. Complete the FAFSA
The very first step for any college-age student who needs funding is to fill out the Free Application for Federal Student Aid (FAFSA). This is a form you fill out each year that your school and the US Department of Education use to determine how much and what type of funding you are eligible for — based on factors such as your family’s income and school expenses student loans can you take out
If you’re looking to take out student loans without a credit score or strong credit history, chances are you’re turning to federal loans. The FAFSA is a mandatory first step toward eligibility and access to federal student loans, so it is important to complete this form as soon as possible.
Both students and parents can complete the FAFSA. You must provide certain personal and household information such as: e.g.:
- Your date of birth and social security number
- Any schools you are considering, even if you have not yet applied
- Your family and household information
- Income tax information for you and your parents (this is required in some cases even if you live away from home)
To learn more about the FAFSA and start the process, visit the StudentAid.gov website.
ARE THERE ANY FAFSA INCOME LIMITS?
2. Check your eligibility for student loans and federal financial aid
Once your FAFSA is received and processed, each school you included on the form will send you a letter of eligibility and financial aid once you have been accepted at that institution. This letter will tell you what federal loans you are eligible for, what other financial help you may be able to get, and give you an idea of your deficit.
federal and private student loans work varies greatly, so it is important that you first exhaust all of the government student loan options available to you before taking out private student loans to pay for college.
Federal student loans offer the following advantages:
- Federally subsidized and unsubsidized loans are not credit dependent, so you can still take them out even if you have one bad credit or a limited credit history.
- These loans have fixed (and often competitive) interest rates that are set when the loan is paid out.
- Federal borrowers may be eligible for income-based repayment (IDR) plans and student loan forgiveness in the future.
- If a financial emergency arises later, federal loans offer deferral and deferral options.
The government pays all accrued interest on subsidized federal loans while you’re still enrolled in school and during your grace period, so these are the first loans you should take. You pay the interest accrued on unsubsidized federal loans while you’re in school. However, since they aren’t loans, they should be your next choice if you don’t have credit.
If you need to take out personal student loans, visit Credible Compare interest rates on private student loans from different lenders in minutes.
3. Compare private student loans
Once you’ve exhausted all of your government student loan options, accepted any scholarships or grants that were offered to you, and utilized any educational savings, it may be time to consider private student loans to cover the rest.
Private credit service providers can be any number of financial institutions such as banks, credit unions, or online lenders. These lenders set their own requirements in terms of creditworthiness, credit limits, and interest rates, so it’s important to compare them carefully beforehand you apply.
You should consider the following:
- Loan terms (how long do you have to pay off the debt)
- Waiting period (how long do you have after high school or dropping out of school before the repayment begins)
- Interest rate (including fixed or variable term)
- Discounts or benefits, such as cashback for good grades or an interest deduction for automatic payments
- Eligibility requirements (usually a minimum FICO score or annual income)
If you have no credit, bad credit, or little to no income, in most cases you will not be able to take out a no-cosigner personal student loan. This co-signer—this can be a parent, grandparent, sibling, spouse, or other willing adult—signs your loan and agrees to repay it if you are unable to.
Paying for college is a costly endeavor that often requires the help of government and private student loans. knowledge how to get student loans is one step in the process, but understanding your options and limitations when you don’t have credit is another. Luckily, students (and their parents) with limited credit have many options available — you just need to know where to look.
With Credible it is possible Compare interest rates on private student loans without affecting your creditworthiness.