Best Student Loans For Bad Credit in 2024

Going to college or university is a dream and a necessity for many Americans. In addition, statistically, students spend between $60,000 and $130,000 each year on tuition, living, and other mandatory expenses, so only a few can get by without additional loans.

Of course, if your credit score is above 670 FICO points, it will be easy to borrow money on favorable terms, but what if you have bad credit? In this article, we’ve looked at all the options available to those who want to get money without credit checks at a low APR for several years. Let’s discuss all of these options.

Student Loans For Bad Credit: Best Offers

There are several types of these loans that students with low FICO scores should consider:

  • Loans with a co-signer, which can be your parent or another person with 700+ FICO points;
  • Federal subsidized and unsubsidized student loans.
  • Different organizations give private student loans.

You should study the basic information about each type before making the best decision. To make it easier, we have analyzed the best offers from different financial institutions and written summaries of each. Be sure to read this information.

Ascent Independent Student Loan

This is the best option if your parents have a good credit score or you can find another creditworthy co-signer. In that case, you’ll pay between 3% and 11% APR and can borrow money for 5 to 15 years.

The minimum amount you can expect is $2,000, and the maximum is $200,000. If you want to get a loan without a co-signer, you need a credit rating of 680 or higher and a credit history of more than two years. It is also possible to take a future income-based loan, but only if you are a junior or senior with a 2.9 GPA.

Your fixed APR can range from 3.8% to 13.15% if you take advantage of this offer. The only pluses of this option are the soft credit check, no origination and prepayment fees, and offices in all 50 states. Like all banks, you can get money here with poor credit if your cosigner’s FICO score exceeds 700. However, Ascent has a few disadvantages:

  • International students can’t get credit with a co-signer.
  • You wouldn’t qualify for the offer if you enrolled less than half-time.
  • Late fees apply to all student loan payments over ten days late.
  • If you apply without a co-signer, you must have good credit. In this case, your minimum income for the past two years at the time of application must be $24,000 annually.

This is a good option, but it is better to look into federal student loans, as they have better terms and conditions.

Federal Subsidized

All credit counselors recommend starting with these loans because they do not require credit checks, have a low APR (5%-6.5%), and have a longer repayment term of 10 to 30 years.

But, of course, this option has a significant disadvantage, namely the limited student loan amount – up to $20,500 per year and up to $57,500 for a borrower’s undergraduate career (no more than half of this amount can be subsidized).

Often students who do not have enough of this loan to cover all their expenses will take out an additional personal loan or credit card – you can calculate all your options and determine the one that works best for you. If you borrow money from the Federal Subsidized, you should be prepared to pay a 1.057% origination fee and late fees.

However, this option is suitable for those who are half-time or international students. In addition, the offer is available in all 50 states for students in any school authorized to receive federal loans.

Remember that applying for and receiving money can take up to several months, so you should do it well in advance. This option is generally best for those with no co-signer, a low FICO score, and low tuition.

Funding U Private Student Loan

Funding University is an organization created six years ago to help students who don’t have a co-signer but have a dire need for a loan to pay tuition. This may be your best lending option if you are a bona fide student with a high GPA.

The whole point is that Funding U is not a conventional bank that only considers your credit history and income in its decision-making process. Instead, its staff will evaluate your academic performance, future income, and expenses while studying.

Only first- and second-year students from specific schools, a list of which can be found on the organization’s website, can apply for this type of loan. In addition, you must meet reasonably stringent requirements:

  • Attend nonprofit colleges.
  • Have a 90% graduation rate with 3.5 high school GPA (first-year); a 70% graduation rate with 3.0 GPA (second-year).

The significant drawback of this option is the small maximum loan amount, only $20,000. In addition, this money is given for ten years after the soft credit check.

The good news is that Funding U does not charge students origination, late, or prepayment fees and has no minimum income requirements for applicants or FICO score points. This financial institution only operates in 36 states, so check to see if it works in yours.

A.M. Money Private Student Loan

Note right away that this financial institution has temporarily suspended its student aid program as of May 2022. However, it still accepts applications from anyone interested and will assume them once it resumes operation.

Overall, this option is great for those who do not have a cosigner but have academic achievement. Like its predecessor, A.M. Money is based on your merits, so it does not require a certain level of FICO points, only a GPA, and it has student support programs at 23 U.S. universities, most of which are in Illinois. A.M. Money’s terms and conditions are as follows:

  • The minimum amount is $2,000, and the maximum is $50,000.
  • Maximum APR is 8.85%.
  • The repayment term is ten years.
  • Usually, only juniors, seniors, or graduate students can get the money.
  • All program participants must pay an origination fee of 4.5% (included in the loan amount).

This loan is best used in addition to the federal student loan to cover your expenses. If Pell-eligible, you have a better chance of getting money from this organization.

Prodigy Private Student Loan

This option is best for international students or those who want to pursue a master’s degree abroad. Since 2007, Prodigy Finance has been helping graduate students cover their living and study expenses by offering private student loans of up to 100% of the total cost of attendance for up to 20 years. The organization is based on the following model:

  • You must be a successful student and a promising professional from a high-demand field who can have a high income level after graduation.
  • You fill out your application, academic credentials, and professional background.
  • Based on your information, the organization will find an investor willing to loan you an average of 9.8% variable APR for 7 to 20 years. The loan amount includes an origination fee of 5%.

Before you apply, consider that an investor can take up to several months to find. If this is your only option, fill out the application and join a waiting list to get a response from the organization as quickly as possible.

Stride Funding Income Share Agreement

The goal of this organization, established in 2018, is to provide students with an alternative to traditional loans through income-share agreements. This option may be great for those who want to start working right away while studying because the company doesn’t just help financially but also creates career opportunities through workshops, internships, and networking. Stride’s loan terms are as follows:

  • The maximum loan amount is up to $25,000 for a year of training.
  • Income share percentages are from 2% for every $10,000.
  • The term of the loan can be up to 10 years.
  • You do not have to be a student at a specific institution; you need to attend an eligible program and school. As a result, future professionals in high-earning fields, such as STEM, health care, or business, have more chances.
  • Your income level must be between $30,000 to $40,000 per year.

One of the most significant advantages of Stride is that there are no credit checks, as the organization looks at your potential and possible future income, not your past. In addition, the company operates in 45 states, and undergraduate, graduate, or doctoral students with a GPA above 2.9 can get the money.

What Are Student Loans with Bad Credit?

Sometimes the only barrier to getting a quality education is a bad financial situation. Of course, a loan can save you in that situation, but what do you do if you have less than a 670 FICO score? Turn to organizations that lend money without a credit check. Most often, students without a good credit score are offered one of the following three options:

  • The state issues most federal student loans, so they have the best interest rate and repayment terms and don’t require good credit scores. The only significant disadvantage of federal loans is the low maximum loan amount.
  • Private student loans with a co-signer. Usually, the student’s parents act in his role; the main thing is that their minimum credit score is higher than 700 points. A minus is that this option is rarely available to international students.
  • You can obtain private student loans if you have academic achievements and study in one of the promising fields. Of course, this option is not suitable for everyone, but it is one of the most advantageous due to the low APR and absence of credit checks.

Dozens of organizations in the United States can lend you money to pay your tuition on favorable terms. Remember, however, that this is not a quick process, especially if you want a loan based on your potential and academic success. Therefore, it is best to address this issue as early as possible. Remember that with student loans, you can take, for example, a credit card for groceries or for your car, it depends on your needs.

What Credit Score Do I Need For Bad Credit Student Loans?

You can borrow money with a minimum credit score of 500-670 FICO points. For example, you can apply for federal student loans or private loans from an institution that looks at your future potential and merit, not your repayment history. How can you get a loan with a minimum credit score?

  • Take advantage of a co-signer, such as one of your parents, in which case even private financial institutions or online lenders won’t pay attention to your adverse credit history.
  • Seek help from the state and get a federal student loan.
  • If you already have a minimum income of $30,000 yearly, you can receive private student loans based on your potential earnings, like the Stride Funding Income Share Agreement.

If your credit scores exceed 670, you will have no problem getting a student loan, even without a cosigner.

What Should You Consider Before Choosing a Student Loan with Bad Credit?

As with anything else, the first thing you should consider before borrowing money is how you will pay it back. It’s essential to have at least a small source of income or enlist your parents’ help so you don’t end up in debt, which is a problem for many students.

Also, before you take out a loan, make a clear plan of which options you will consider first and which ones last. By no means accept every offer; compare several options and choose the best one because that loan will last for at least the next seven years. For example, you can move through this plan, choosing the best student loans for bad credit for you:

  1. Consider federal student loans first. Fill out the FAFSA to see if you qualify for grants or scholarships – this will help considerably reduce the amount of borrowing. Be sure to consider direct subsidized loans first, and only then consider unsubsidized loans.
  2. If this option doesn’t work for you, try to find a co-signer with good credit to get the best terms from private student loan lenders.
  3. Can’t find a co-signer? Try organizations that work with investors willing to lend money to students in promising fields. Most private lenders work on this model, so try it.
  4. Analyze all the options you have received. Which one will give you the lowest amount of credit? Which will help you pay off your splurges without credit cards or extra borrowings? Choose only the option whose monthly payment is the most comfortable, and try to select credits with fixed interest rates.

Remember that if you can’t find the best alternative, you can always ask for help. Also, if you already have student loan debt you can’t repay, contact financial experts at your university or college to discuss a student loan consolidation program.

Pros and Cons of Student Loans with Bad Credit

Of course, the most crucial advantage of such private loans is that with their help, you can pay for your education, get a high-paying profession, and arrange your life. But that’s not all:

  • With a loan, you can get into the university of your dreams. We know how often the barrier to a good education is financial hardship – so student loans may be your best option.
  • With this money, you can cover many expenses, not only tuition. For example, you can buy a laptop or pay for your living expenses without using credit cards.
  • If you pay off your student loans on time, you can significantly improve your credit scores.

However, there are some downsides to this option of borrowing money:

  • First, they are costly, especially for students not yet earning money.
  • On average, such a loan has a 10% APR, which means you’ll pay back the amount you borrowed twice in 10 years.
  • The desire to study can get you into debt.
  • We all understand how difficult it is to combine work and study – so if you can cover tuition costs without loans, consider taking advantage of it.
  • You cannot eliminate your student loans, even if you declare bankruptcy.

Financial advisors say this all the time, and it applies here as well – a loan is only a good solution if you can pay it off. If you doubt your ability to pay, it may be worth putting off going to university for one year and earning money to pay your tuition so you don’t risk your nerves and credit history.

How to Apply for Bad Credit Student Loans

Before you apply for a loan, you should determine precisely how much you want. First, calculate how much your tuition and living expenses will cost – these are the minimum expenses you should preferably cover with a loan if there are no other options. From there, you can proceed according to this plan; all actions can be done online:

1. Gather all the information you need as an applicant.

Visit the website of the organization you want to borrow from and find out what documents you need. This will save you a lot of time, and you can apply in minutes.

2. First, apply for federal student loans.

Fill out the application on the organization’s website where you decide to borrow money, and answer a few questions about your school, your status, the amount you need, your expected enrollment status, and your graduation date. Remember to provide proof of your identity, address, and Social Security number.

3. Based on the information you submit, you can see the loan terms and conditions.

If they are right for you, go to the next step – accept the offer and choose a repayment plan.

4. Upload all required documents and wait for the company to verify them.

Once the staff is satisfied that all the files uploaded are genuine, you can move on to signing the contract. Of course, this plan is not always suitable – it all depends on which organization you decide to get a loan from because sometimes the whole process stretches for several months. However, this is generally how federal and private student loans work.

How to Improve Credit Score As a Student

Your credit history is essential, so you should do everything you can to increase your credit score:

  • Start building your credit history.

For example, you can buy a small gadget in an installment store for several payments, even if you have the entire amount.

  • Get a credit card.

You may have to start with a Secured Credit Card if you’ve never used credit.

  • Pay your bills on time.

This is also one of the indicators that affect your credit score.

  • Check your credit report for errors or negative marks.

If you find such information on your report, find out how to remove it because it can significantly lower your credit score.

Student Loan Alternatives for Bad Credit

If you don’t want to apply for student loans, you can use the following alternatives:

  • Personal loans. They have low interest rates and allow you to borrow up to $100,000 for several years, but only if you have a good credit account. Besides, if you’re a member of one of the credit unions, you can obtain money on the most favorable terms.
  • Help from parents or loved ones. If one of your relatives can help you with your tuition, this will be an excellent option since you won’t have to pay too much interest on the loan.
  • Scholarship. If you have an excellent academic record, you can apply for one of the many scholarships from the U.S. government or private universities looking for gifted professional students.

Federal and private student loans are pretty lucrative compared to other types of credit, but if you are not sure you can pay them back in time, it is best not to use this option.


You can get federal student loans with any credit score or borrow money from a private institution without a credit check if you are a professional student with academic achievements in high-earning fields. You will also have access to private loans from financial companies if you use a co-signer with an account above 700 points.

There are dozens of institutions in the U.S. that offer these types of loans, so you should be able to find one that will work for you, even with minimal credit. Also, keep in mind that there are federal subsidized and unsubsidized loans that do not require a credit check.

No, many private lenders do not require a credit check if you are a student in a promising field or have a high income level. You can also apply for federal student loans, which are available without a credit check, or receive a bad credit student loan from private financial institutions with a co-signer.

Yes, this can affect your credit score like any new loan. But don’t worry; if you make your monthly payments on time, your FICO score will go up in 1-2 years, which will help you get better terms for new loans.