Best Student Loans for Bad Credit

Exhaust federal loans before looking for private student loans for bad credit

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If you're planning on going to college, you'll likely need to take out student loans to pay for school. According to The Institute for College Access & Success, 65% of college seniors who graduated from universities in 2018 left school with education debt.

It's best to exhaust all of your federal student loan options before even considering private student loans. Rates for federal loans issued between July 1, 2020 and June 30, 2021 will drop from 4.53% to 2.75% for undergraduate Stafford loans.

However, having less-than-stellar credit can make qualifying for student loans difficult. Private student loan lenders base their decision on your income and credit history. As a college student, you likely have poor credit or no credit at all, so you'll struggle to find a lender willing to work with you. 

To help borrowers pay for college, we looked at the top lenders in the country to identify the best student loan options for people with bad credit.

Best Private Student Loans for Bad Credit

Earnest: Best With a Cosigner


If you have access to a cosigner, Earnest might be able to offer you a student loan. Its minimum credit score requirement for a cosigned student loan is 650 for the cosigner, and no score is required for the student. That's the lowest credit score requirement of the lenders we've reviewed.

While the minimum credit score is low, there are factors for approval that might make getting an Earnest private student loan difficult.

  • You must be enrolled in school full-time if you're a Freshman, Sophomore, or Junior or at least half-time for Seniors and Graduate students.
  • You must have enough savings to cover at least two months of normal expenses, including housing.
  • You can't carry large amounts of non-student, non-mortgage debt (e.g. credit cards, personal loans).
  • You must prove you spend less than you earn and show increasing bank account balances.

If you meet those guidelines and Earnest's other eligibility requirements you can get competitive rates on a cosigned student loan. With a 0.25% autopay discount current interest rates are:

  • Variable Rates: 1.30% to 11.69%
  • Fixed Rates: 3.49% to 12.78%

With Earnest, you can borrow $1,000 up to the total cost of attendance of your program with loan terms of five, seven, 10, 12, or 15 years.

Read the full review: Earnest Student Loans

Ascent: Best Without a Cosigner


Ascent offers two non-cosigned private student loans. The first is credit-based, students with a credit history need at least a score of 680.

The other is a Non-Cosigned Future Income-Based Loan. College juniors and seniors with no credit score or a score below 680 may be eligible for a non-cosigned loan if they're enrolled full-time in a degree program at an eligible institution

Ascent private student loans have competitive interest rates. Interest rates for non-cosigned loans with a 0.25% autopay discount are currently: 

  • Variable Rates: 2.46% to 12.40%
  • Fixed Rates: 3.39% to 13.56%

With Ascent, you can borrow $2,000 to $200,000. As an added perk, the lender offers a 1% cashback reward when you graduate if you meet certain terms and conditions.

Read the full review: Ascent Student Loans

What Is a Student Loan for Bad Credit?

A student loan for bad credit is typically a private loan that helps you pay for college but doesn’t have as stringent credit criteria as other loans. A student loan for bad credit could also allow you to have a cosigner with better credit. A federal loan is also an option for students with bad credit because federal loans don’t perform credit checks. 

Student loans are money borrowed from the government or a private lender to pay for college. The loan has to be paid back after graduation, along with interest. The loan can usually be used to cover tuition, room and board, books, and other school-related expenses. Student loans are different from scholarships and grants, which don’t have to be paid back.

How Does a Student Loan for Bad Credit Work?

The student loan for bad credit works the same as a regular student loan, except that you may need a cosigner or have to pay a higher interest rate because of your low Fico score. Typically, private student loan lenders base their lending decisions on your Fico score and credit history, but since most college students don’t have much credit history, they may need a parent to cosign the loan with them. 

What Is an Average Interest Rate for Student Loans?

Student loan interest rates vary and federal loans usually offer the lowest rates. As of October 2020, the average federal student loan rate was 2.75%. However, private student loan interest rates can be much higher and easily go up to 16%. 

How Much Do Student Loans for Bad Credit Cost?

As with all student loans, you may incur some costs in the form of origination fees, prepayment fees, and late fees. However, the major costs are almost always incurred with interest. This is usually paid back along with the loan principal sometime after graduation. 

Are Private Student Loans Worth the Cost?

You should apply for federal loans first and exhaust all of your resources before applying for a private loan because they can be quite expensive. However, if you’re determined to further your education and a private loan is the only option, then it’s worth the cost. After all, it’s helping you pay for your education and a four-year experience you wouldn’t otherwise experience. Of course, college can also help you qualify for a higher paying job. 

How We Chose the Best Student Loans for Bad Credit

We researched dozens of student loans tailored to students with bad credit. We reviewed them and selected our top choices based on their interest rates, co-signing options, fees, loan amounts, and repayment terms. 

Article Sources

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  1. The Institute for College Access & Success. "Student Debt and the Class of 2018." Accessed July 15, 2020.

  2. Earnest. "Eligibility Guide." Accessed July 15, 2020.

  3. Earnest. "Student Loan Rate Disclosures." Accessed Dec. 3, 2020.

  4. Ascent. "Cosigned Student Loans Designed With You in Mind." Accessed Jan. 13, 2021.