Student Loans for Bad Credit [2024] Best Private and Public

Higher education is important – but boy, can it be expensive! The average cost of college is $36,436 per year. Yikes!

Not many students have that type of money. That’s where student loans come in.

Applying for a loan can be intimidating, especially if your credit isn’t great. But don’t worry! There are options available, and I’m here to explain them.

In this overview, I’ll walk you through the best student loans for bad credit – including private loans from lenders and public loans from the U.S. government. 

Best Private Student Loans for Bad Credit

With the right strategy, you can find a way to fund your studies – even if your credit score isn’t as high as you’d like it to be.

Here are the best private lenders offering student loans for bad credit.

1 – Sallie Mae

Minimum Credit Score Required: 650

Fixed APR: 3.49% – 15.49% (for undergraduate loans)

Variable APR: 4.92% – 15.08%

Loan Amounts: $1,000 – up to 100% of your school-certified expenses

Available Term Lengths: 10-15 years

Sallie Mae is a great option for anyone who needs student loans for bad credit. Why? Because it encourages people to apply with a cosigner – and having a cosigner makes it three times more likely that your application will be accepted.  

A cosigner is someone with better credit who agrees to share responsibility for the loan. So if you have someone in your life who’d be willing to do it, it’s definitely worth trying. 

Pros

• Your loan can cover 100% of your educational costs, including textbooks, travel expenses and equipment like a laptop.
• Even part-time students can get a loan from Sallie Mae. 

Cons

• There’s no way to refinance a loan from Sallie Mae.
• You can’t see your specific terms without filling out an entire application.

2 – College Ave

Minimum Credit Score Required: 650

Fixed APR: 4.42% – 15.99%

Variable APR: 5.29% – 15.99%

Loan Amounts: $1,000 – The full cost of your education, minus financial aid

Available Term Lengths: 5-20 years

Eligibility Requirements: Must be a U.S. citizen, a U.S. resident, or have a U.S. social security number; must be enrolled at an accredited institution

College Ave offers student loans for bad credit, as long as you have a cosigner with a credit score in the mid-600s or higher.

College Ave also gets excellent reviews online. It even has a 4.6-star rating on Trustpilot. That’s pretty amazing, especially for a lender. 

Pros

• You can apply and get a decision in just 3 minutes.
• You can opt for just a 5-year term, which will reduce the total cost of the loan.
• In reviews, people rave about College Ave’scustomer service.

Cons

• While you can get forbearance (meaning you get to take a break from making payments), it’s only granted in increments of 3 – 6 months.
• You only get 12 months of forbearance in total.

3 – Ascent

Minimum Credit Score Required: None 

Fixed APR: 4.48% – 15.38%

Variable APR: 5.94% – 15.83%

Loan Amounts: $2,001 – $400,000

Available Term Lengths: 5 – 20 years

Eligibility Requirements: Must be enrolled full-time or half-time; must be a U.S. citizen, permanent resident, or have DACA status; cosigners must be U.S. citizens or permanent residents

Ascent doesn’t just offer student loans for bad credit. It also sets itself apart from other lenders by offering “outcomes-based” student loans. 

If you’re a junior or senior with a GPA of 3.0 or higher, you can get a loan without a cosigner, no matter your credit score. Granted, the interest rates are higher (12.60% -14.24% for fixed-APR loans), but it’s still a nice option to have.

Ascent also offers traditional student loans, where approval is based on the credit of either the student or their cosigner. 

Pros

• The “outcomes-based” model allows studious upperclassmen to get a loan without having to worry about credit.
• You can get an interest-rate discount just by setting up automatic debit payments – 1.00% for outcomes-based loans and 0.25% for credit-based loans.
• Deferment and forbearance are available if you’re struggling to make payments.

Cons

• International students can’t access outcomes-based loans, and they must have a cosigner who’s a U.S. citizen or permanent resident.
• You must be enrolled at least half-time.

4 – Funding U

Minimum Credit Score Required: None

Fixed APR: 6.99% to 12.49%

Variable APR: Not offered

Loan Amounts: $3,001 – $20,000 per year

Available Term Lengths: 10 years

Eligibility Requirements: Must be a U.S. citizen or permanent resident; must be 18+; must be a full-time undergraduate student enrolled at a Title IV-eligible 4-year institution

Funding U is different from most lenders because it doesn’t demand cosigners. That makes it a great provider of student loans for bad credit – especially for people who don’t have a cosigner to help them.

Funding U takes three factors into account when deciding your interest rate:

1. Your creditworthiness
2. Your school year
3. Your GPA

Pros

• There are no cosigners required, so you don’t have to second-guess yourself when applying alone.
• Your GPA affects your interest rate – meaning your hard work in school will have a financial reward!
• You’ll be assigned a dedicated loan officer to walk you through the process.

Cons

• Loans aren’t available in all 50 states.
• You can’t use a cosigner, even if you want to. 
• Loans are only available to undergraduates.

5 – Earnest

Minimum Credit Score Required: 650

Fixed APR: 4.42% – 16.20%

Variable APR: 4.43% – 15.90%

Loan Amounts: $1,000 – $138,500 per year

Available Term Lengths: 5-15 years

Eligibility Requirements: Must be a U.S. citizen or have non-conditional, 10-year permanent residency; undergraduates must be enrolled at least half-time; must be pursuing a degree at a Title IV-qualified non-profit 4-year institution

Earnest offers student loans for bad credit, and it has some of the lowest interest rates around.

But with Earnest, it’s definitely better to have a cosigner. Applicants with cosigners are five times as likely to get approved!

Pros

• There’s a 9-month grace period after you finish studying.
• You’ll get a 0.25% interest rate reduction if you use autopay. 

Cons

• There are relatively strict requirements for cosigners, including a minimum annual income of $35,000.
• Loans are unavailable in Nevada.

Best Public Student Loans for Bad Credit

The best student loans for bad credit aren’t actually offered by a bank or private lender. They’re offered by the federal government! 

So if you want to fund your education while minimizing debt, your first option should be a federal student loan. 

1 – Federal Student Aid

Minimum Credit Score Required: None

Fixed APR: 5.50% for undergraduates, 7.05% for graduate students

Variable APR: Not available

Loan Amounts: Up to $57,500 total for undergraduates, up to $138,500 total for graduate students

Available Term Lengths: 10-25 years

Eligibility Requirements: Must be a U.S. citizen or “eligible noncitizen” with a social security number; must be enrolled or accepted in an eligible institution; be “qualified” for higher education (through a high school diploma or G.E.D.); must complete and sign a FAFSA form; must maintain “satisfactory academic progress.”

The federal government offers two main types of student loans:

1. Direct Subsidized Loans – The government pays the interest while you’re studying and during a deferment period, so the total cost of the loan is lower.
2. Direct Unsubsidized Loans –  You’re responsible for paying all the interest, so the total cost of the loan is higher. 

The federal government offers another type of loan called a Direct PLUS Loan, which is available to parents of students as well as graduate or professional students. 

Oh, and there are no credit requirements whatsoever. How’s that for some good news?

Pros

• Federal student loans generally have lower interest rates than private student loans. 
• You can work with the servicer to refinance or defer payments. 
• You don’t need credit history or a cosigner.

Cons

• You might not qualify for a subsidized loan.
• You can only borrow up to a certain limit ($57,500 for undergraduates, $138,500 for graduate students).

Best Student Loans for Bad Credit Reddit

I found a Reddit thread where someone asks how they can get a student loan with no credit history.

People responded by saying that the aspiring student would struggle to get a loan since their parents refused to be cosigners. 

One person suggested Funding U, which was a solid recommendation since it doesn’t require a cosigner. 

Commonly Asked Questions About Student Loans for Bad Credit 

What’s The Difference Between Private and Public Student Loans?

Private loans are offered by banks, lenders, and private companies, while public (or “federal”) student loans are provided by the federal government. Federal loans generally have lower interest rates, but they might not cover the full cost of your education. 

Student Loans for No Credit?

Your first choice should be to get a federal student loan since they generally have lower interest rates. But if you need more options, you could qualify for a private student loan from these lenders:

• Sallie Mae
• College Ave
• Ascent
• Funding U
• Earnest

Can I Get a Student Loan With Terrible Credit? 

You can probably get a student loan with terrible credit. First, see if you’re eligible for a federal student loan. They’re great because they don’t have a minimum credit score requirement. And if you need more funding, try applying for a private student loan along with a cosigner or checking out these other ideas for how to pay for college. 

If you need help fixing your credit, check out our comparison of Credit Saint vs Lexington Law, or see if working with the best tradeline companies could be the right credit repair solution for you. 

Meanwhile, learn how to budget for non recurring expenses so you can be prepared for unexpected costs going forward. 

Can You Get a Student Loan With a Credit Score of 400? 

Even with a credit score of just 400, you can probably get a student loan. Federal student loans don’t have a minimum credit score requirement. And if you need a private student loan, you can increase your chances of being accepted by applying with a cosigner. In fact, Sallie Mae claims borrowers are three times more likely to get approved with a cosigner.

What Credit Score Do You Need for a Student Loan? 

For a federal student loan, there’s no minimum credit score. And for most private lenders, the student’s credit score doesn’t matter as long as there’s a cosigner. Take College Ave, for example. The student’s score is irrelevant if they have a cosigner with a score in the mid-600s or higher. 

Can I Get a Student Loan With No Income? 

You can absolutely get a student loan with no income. In fact, the whole point of a student loan is to let you focus on your studies for a few years without having to worry about earning money. With private student loans, however, your cosigner might need to show some income. Top lenders to check out are Sallie Mae, College Ave, and Ascent.

No Credit Check Student Loans?

Federal student loans don’t require a credit check. They also have lower interest rates and more flexible terms, making them the best choice for students. Pretty much any private lender will do a credit check, but you can increase your chances by applying with a cosigner.

Personal Loans for Students With No Income?

It’s possible to get a personal loan as a student with no income – but it can be difficult. Also, lots of lenders won’t allow you to use personal loans for education-related expenses. Consider applying with a cosigner to increase your chances of acceptance.  According to Sallie Mae, students are three times more likely to get their loan approved with a cosigner!