Most students are not fortunate to have been born with a silver spoon in their mouth. They face difficult times since most don’t have time to spare for a part-time job. They not only struggle with their tuition but also paying other personal expenses like rent, and books among others.
Students are regarded as leaders of tomorrow. But in truth, for them to have any chance in this world they have to complete their education. And in order to do that, they need money. So where does a student who has no credit get a loan? Well, this post will answer that and also provide much more.
Is credit an enemy of the student?
Your credit is responsible for determining whether you can qualify for a loan. For most college students, they either have no credit or have hits in their credit which has resulted to a bad credit. This makes it pretty difficult to receive an approval to most loans with
In the eyes of the lender lack of a credit history isn’t any better than a bad credit. As much as maintaining the health of your credit is well advertised, this is almost a mission impossible to most students.
While you might be asking the best loans for you, it would be best to start looking for grants. There are specific categories for tuition and education. If successful, there would be no need to borrow extra money as the amounts offered are usually a lot. If for any reason you have to borrow, you could apply for the following loans.
No check credit loans
Federal loans should be second step you take; the credit is put in the back seat as no checks are made. An example of a federal loan is Perkins loan.
Ø Perkins loan
These are funds that are transferred directly to the institution you are taking your course. They are accessible to both undergraduates and graduates. This loan is offered to students who come from families that have low income.
By proving that you are in need of financial aid, you can qualify for this loan. The earlier you apply the better your chances of getting this loan. This loan is, however, not available in all institution countywide, you have to check first before applying. No credit checks are required here and the interest charged is a fixed rate of 5%.
Find a cosigner
Because of your limited credit, a cosigner would boost your chances of getting a loan. If other loans don’t work out for you, you need to find a friend who has a good credit and will act as the co-borrower. However, this will also make them responsible for your loan and his/ her credit score will receive strikes if you default or are late on a payment.
After receiving a loan, you also have to manage how you will make the payments. This is an opportunity to repair or build your credit by ensuring you make early payments. If paying off the debt is initially an issue, you should talk to your lender so that you can opt for a repayment arrangement that will suit your current situation.
Another route most students will tend to take is to consolidate these loans so as to have a single manageable loan.