College isn’t cheap. In the 2019-2020 school year, average tuition and fees were $9,400 for a four-year public institution, and $36,700 for a private four-year institution, according to the National Center for Education Statistics. (That dollar amount is per year, to be clear.)
While student loans are available to young adults and their families to help cover the costs, it’s not always easy for everyone to qualify.
Thankfully, there are options.
What Is a Student Loan for Bad Credit?
A student loan for bad credit is a federal or private loan available to people with a limited or poor credit history. These loans might carry higher interest rates, but private lenders typically take a full-picture approach to prospective borrowers including academic history, major and potential earning ability after graduation.
Banks, financial institutions and online-only lenders are a handful of organizations that offer student loans for bad credit.
Most lenders review a borrower’s credit history and credit score — and want to see a solid score, at that — when determining whether or not to lend someone money. If you haven’t had a steady work history, taken out a loan before or opened a credit card, it might be difficult for you to qualify for a loan or at least get one without a high interest rate. Similarly, if you don’t have a reliable, creditworthy cosigner in your network, it can also make qualifying (and at a decent rate) difficult.
That’s where student loan lenders — of both private student loans and federal student loans — can help meet this need.
If you have no credit history — or adverse credit history — these private and federal student loan lenders can help provide you with financing to attend college, a trade school or coding boot camp.
Student Loans for Bad Credit at a Glance
|Lender||Loan Amount||Fixes or Variable Rate||Rate Range||Cosigner Required|
|Ascent Funding||Up to $200,000||Both||1.47% to 14.08% APR||No||SEE DETAILS|
|Citizens Undergraduate Student Loan||$1,000 to $150,000||Fixed||3.48% to 10.78% APR||No||SEE DETAILS|
|Earnest Private Student Loans||Starts at $1,000||Both||Starts at 0.94% APR||No||SEE DETAILS|
|Edly IBR Student Loan||Up to $25,000||n/a||None||No||SEE DETAILS|
|Federal Student Loans||$5,500 to $12,500 per school year||Fixed||3.73% to 6.28%||No||SEE DETAILS|
|Funding U||$3,000-$15,000 per school year||Fixed||7.49% (6.99% with AutoPay) to 12.99%||No||SEE DETAILS|
|MPOWER Financing Student Loans||$2,001 to $100,000||Fixed||Starts at 9.56% APR||No||SEE DETAILS|
|Prodigy Finance Student Loan||Various||Variable||Starts at 5.91% APR||No||SEE DETAILS|
|SoFi Private Student Loan||Starts at $5,000||Both||1.36% to 11.79% APR||No||SEE DETAILS|
9 of the Best Student Loans for People With Bad Credit or No Credit
Here are our top picks for the best lenders and companies that offer student loans. Most are private lenders and allow you to apply for funding directly on their website (or at least determine your eligibility).
Unless otherwise specified, rates and terms are for undergraduate loans. Also, while none of the lenders on the list required a cosigner (and some outright don’t accept them), other lenders do let applicants use them, which might result in better loan terms.
They are listed in alphabetical order.
Best for Students in Coding Boot Camps
- Offers funding for higher ed and boot camps
- Students can borrow up to $200K
- International and DACA students can apply
Ascent is a private loan lender that offers funding for both colleges and coding boot camps. Ascent has a variety of undergraduate (cosigned and non-cosigned) and graduate-level loan options, and funding for international and DACA (Deferred Action for Childhood Arrivals) students. The lender also offers scholarships and an Ascent Rewards program where borrowers can get cash back.
More Information About Ascent Funding Student Loan
Ascent offers student loans (private) and coding boot camps loans (consumer). Borrowers will want to make sure their school or program is covered before applying for an Ascent loan. Interest rates also vary, depending on a number of factors, including whether you have a cosigner and have a variable or fixed rate.
Best for Creditworthy Cosigner Possibilities
- Borrowers can secure up to $150K
- In-person and online banking options
- Graduate and parent loans available
Citizens Bank is the 13th largest retail bank in the U.S. It supports personal and business banking, and offers a variety of accounts, credit cards, loans and other products. Citizens Bank has a wide presence online and off, with online and mobile banking, a 24/7 customer contact center, 940 branches and 3,000 ATMs.
More Information about Citizens Bank Undergraduate Student Loan
Citizens Bank offers undergraduate, graduate and parent loans. Rates are fixed and repayment terms are available in five-, 10- and 15-year increments. Borrowers must meet several requirements to qualify for a loan, including be U.S. citizens or permanent residents (although international students can apply with a credit worthy citizen or permanent resident cosigner), be enrolled at least half time and have no previous loan defaults on their record.
Best for Long Grace Period
- Good for borrowers with little credit history
- Low APR
- Nine-month grace period
Earnest is a private loan lender that strives to make the borrowing process transparent and simplified. The company offers various private loans, including personal loans in cooperation with Fiona, a loan search engine. Earnest has nearly 200K users and a 4 ½-star Trustpilot rating. Borrowers with Earnest can take advantage of generally lower interest rates and a longer repayment grace period.
More Information About Earnest Private Student Loans
A limited credit history won’t hurt you when applying with Earnest, if you can provide evidence of academic and professional achievement. Borrowers must be 18 years old; a U.S. citizen or possess a 10-year permanent resident card; attending, or plan to attend, a Title IV institution; and one of the 48 states Earnest lends in.
Best for No Interest
- No interest rates (Yes, really)
- Borrowers can get up to $25K
- Students can pursue various majors
Edly is a lender that provides income-based financing to students (Avenify, a lender for nursing schools, joined forces with the company). Edly works with over 1,700 schools and more than 100 majors. The company works off of an income-based repayment (IBR) model, which means these loans are mostly dependent on how much the borrower makes after graduation.
More Information About Edly IBR Student Loan
Interested borrowers can qualify for funding from Edly in under five minutes. The lender offers income-based payments and borrower protections (if you lose your income, for example, you can defer your monthly payments). Also, students don’t start paying their loan back until four months after graduation — and when they earn more than $30K. No cosigner, minimum credit score or credit history required.
Federal Student Loans
Best for Lower Interest Rates
- Fill out a FAFSA to determine eligibility
- Relatively low, fixed rates
- Up to $12,500 per school year
A federal student loan is a loan from the U.S. government. Students need to fill out a Free Application for Federal Student Aid (FAFSA) form and demonstrate financial need to qualify. Direct subsidized loans, Direct unsubsidized loans, Direct PLUS loans and Direct Consolidation loans are all examples of federal aid.
Federal Student Loans
More Information About Federal Student Loans
Federal student loans are available to U.S. and eligible non-citizens. While not everyone will qualify — on top of filling out a FAFSA and demonstrating a financial need, you must be enrolled in an accepted degree or certificate program and follow other guidelines — it’s worth applying for these loans if you need aid to take advantage of lower, fixed rates.
Best for Future High Earners
- Fixed rate starting at 6.99% interest
- Up to $15K available per year
- Referral program
Funding U strives to help high-achieving students — regardless of income or credit score of a cosigner — secure loans for school. The company works with U.S. citizens 18 years and older who are enrolled in a full-time undergraduate and bachelor’s degree program. But make sure your school and state are eligible for funding (for instance, for-profit schools are not).
More Information About Funding U Student Loans
To determine eligibility, Funding U uses a system that takes into account a student’s academic success, their major, their likelihood to graduate on time and their projected student debt total. Funding U borrowers can also earn a $200 Amazon gift card for referring people to the lender. These private loans are currently not eligible for students in summer school.
Best for International and DACA Students
- Up to $100,000 available to borrow
- Interest rate discounts
- Can be used for any major or degree
MPOWER offers no-cosigner loans and scholarships for people who want to study in the U.S. or Canada. This student-loan lender provides financing to international and DACA students (sometimes called Dreamers), groups often excluded by other lenders. There’s also no requirement for a cosigner or collateral — borrowers can use these loans to build their credit history in the U.S.
More Information About MPOWER Financing Student Loans
MPOWER offers fixed-interest rates (plus, up to 1.50% in interest rate discounts) and flexible loan amounts to qualified borrowers. These funds are greenlit to cover a wide range of school-related expenses (tuition, school supplies, past-due balances) and can be used for any major and degree. No prepayment penalties, either. Students pay interest-only payments while in school and during six months after graduation, so they can begin to establish themselves.
Best for STEM majors studying abroad
- Six-month grace period
- In 150 countries
- Q&As and past webinars on its website
Prodigy Finance is a UK consumer credit provider. It serves international students and works with over 850 schools in 150 countries. Prodigy Finance uses fintech to assess a student’s potential when determining funds — not just their credit history. So, the maximum loan amount allotted is dependent on the university and program.
More Information About Prodigy Finance Student Loan
With Prodigy Finance, you’ll have access to flexible repayment terms, from seven to 20 years. There’s a six-month grace period before borrowers are expected to pay back the loan, and there are no penalties for paying it off early. However, the courses Prodigy supports leans heavily into business and STEM majors, so keep that in mind. Also, while the website has a variety of student resources (webinars, Q&A sessions, etc.), it can be difficult to navigate and find all the answers to your questions.
Best for All-in-One Lender
- Flexible repayment terms
- Low rates
- Exclusive member perks
SoFi is a financial services company with 3.5 million members. The online-only company strives to help people reach financial independence, and offers a number of different banking products and insurance options. SoFi also has exclusive member benefits, ranging from free financial planning and career coaching to SoFi Stadium perks.
More Information About SoFi Private Student Loan
SoFi has a variety of borrower-friendly options, including five-, seven, 10- and 15-year loan terms, and four different repayment options. There are no fees — including no late or insufficient funds fees — and users can also earn SoFi Points (you earn points just for logging into the app).
Why Would Someone Want Student Loans for Bad Credit?
Student loans for bad credit are an option for borrowers who might not otherwise be able to secure a student loan from a traditional bank due to factors like bad or no credit. Without alternative student loan options, many students wouldn’t be able to attend school.
Some 43.4 million borrowers have federal student loan debt and the average public university student borrows approximately $30K to complete their undergraduate degree, according to Education Data Initiative. Without federal and private student loan options, higher education would be out of reach for many people.
To be sure, student loan debt is a major issue in this country — Americans owe $1.75 trillion as of 2022 — and it’s essential that student loan borrowers develop a debt repayment plan. But bachelor’s and graduate’s degrees can still put students on the path to higher earning potential over their careers.
What Do You Need to Get Student Loans for Bad Credit?
When qualifying for a student loan for bad credit, you typically need (or need to be) the following:
- A U.S. citizen or permanent resident
- Your social security number and mailing address
- A photo ID
- A copy of your admission letter
- The estimated cost of your program
- Tax documents
- Enrolled in a qualified program
- Pursue a specific major or field of study
- A high-achieving academic background
- Personal references
Again, this isn’t a complete list and not every lender will request everything listed above. And depending on the lender and type of loan, there may be other documents you need to qualify.
Some lenders might ask for and review your credit history, credit score and work history. For federal loans, borrowers will also need to complete entrance counseling and sign a Master Promissory Note before they can get access to the funds.
Some lenders can get you a rate quote in a matter of minutes online. And from there, you can upload the necessary files, sign your paperwork electronically and be on your way. In many cases, a co-signer with a good credit history and credit score can help improve your chances of getting approved for a loan, too.
Frequently Asked Questions (FAQs) About Students Loans for Bad Credit
There are a lot of questions about this topic and we’ve collected the answers to some of the most common.
Can You Get a Student Loan if You Have Bad Credit?
If you have a bad credit score, you can likely qualify for a student loan. And some lenders don’t check your credit score at all (for instance, most federal student loans don’t require a credit check). However, if you have a history of not paying back loans, that could compromise your eligibility with some private lenders.
What is the Minimum Credit Score for a Sallie Mae Student Loan?
Sallie Mae doesn’t publicize the minimum credit score required for a student loan on its website. However, the company states that its private student loan decisions are based on application data and a prospective borrower’s creditworthiness (amount of outstanding debt, credit history, etc.).
Can You Get a Student Loan with Bad Credit and No Cosigner?
Yes, a student can get a student loan with bad credit and no cosigner. Federal loans, for example, typically do not require solvent credit and a cosigner. Depending on the private student loan lender, a borrower with poor credit and no cosigner might qualify for student loans, but could be faced with higher interest rates. Again, most federal loans don’t require a credit check or cosigner.
How is Loan Money Distributed?
Loan money is usually paid directly to the school. Any leftover money is released to the borrower. There may be different processes for federal student loans and private student loans (and different lenders, at that), so it’s essential that you check out the pay-out process for any loan you’re interested in applying for.
What Types of Students Qualify for Student Loans for Bad Credit?
Undergraduate students, graduate students, DACA students, international students and boot camp students can all qualify for student loans for bad credit. Certain lenders might not offer loans for every category of student. But, private loans and federal student aid are available to qualifying applicants.
Before applying for a loan, a prospective borrower should make sure they meet the stated requirements, as well as check to see if their school or program is eligible. While some lenders cover many majors and universities, others have pretty strict guidelines on what subjects and schools are acceptable.
What is the Minimum Credit Score for a Discover Student Loan?
Discover doesn’t advertise the minimum credit score required to qualify for a private student loan. The company states that it bases a credit decision (and interest rate) on multiple factors — including your credit score, but not entirely determined by it.
Contributor Kathleen Garvin (@itskgarvin) is a personal finance writer based in St. Petersburg, Florida, and former editor and marketer at The Penny Hoarder. She owns a content-writing business and her work has appeared in U.S. News, Clark.com and Well Kept Wallet.