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.

However, having less-than-stellar credit can make qualifying for student loans difficult. Private lenders base their decision on your income and credit history. As a college student, you likely have poor credit or no credit at all, and you may 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 With a Cosigner : Earnest

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, some of these factors for approval could make getting an Earnest private student loan difficult, depending on your situation:

  • 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: 2.55%–7.99%
  • Fixed Rates: 3.22%–8.49%

With Earnest, you can borrow as little as $1,000 and maximum amounts are set based on the primary borrower's level of financial independence. Loans for dependent undergraduate students are capped at $31,000 total for a four-year program. Financially independent undergrads can borrow up to $57,500 total aggregate. Available loan terms include five, seven, 10, 12, or 15 years. Your four repayment options include making $25 payments while in school, making interest-only payments in school, deferring payment until up to nine months after graduation, and immediately making monthly principal plus interest payments on the loan.

Read the full review: Earnest Student Loans

Notes: Earnest is not able to offer variable rate loans in Alaska, Illinois, Minnesota, New Hampshire, Ohio, Tennessee, or Texas.

Best Without a Cosigner : Ascent

Ascent offers two non-cosigned private student loans. For the first option, the Non-Cosigned Credit-Based Loan, students with a credit history need a minimum score, and while it is not listed directly the number comes out to be around 680+.

The other is the Non-Cosigned Outcomes-Based Loan. College juniors and seniors with no credit score, or a score below 680, may be eligible for this loan if they're enrolled full-time in a four-year degree program at an eligible institution and have a GPA of 2.9 or higher.

With Ascent's Outcomes-Based Loan, you can borrow $2,000 to $20,000 per academic year for a total aggregate of $200,000. Your repayment term is 10 years, and repayment starts nine months after graduation. As an added perk, the lender offers a 1% cashback reward when you graduate if you meet certain terms and conditions.

Interest rates for Non-Cosigned Future Outcomes-Based Loans with a 2% autopay discount are currently: 

  • Variable Rates: 7.44%–13.30%
  • Fixed Rates: 9.50%–14.75%

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 creditworthy cosigner. A federal student 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. While the current federal student loan rate is 3.73%, private student loan interest rates can be much higher and easily reach more than 12%. 

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 cost is almost always the loan interest. This is usually paid back along with the loan principal 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 have. Additionally, college can 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, cosigning options, fees, loan amounts, and repayment terms. 

Article Sources
Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.
  1. The Institute for College Access & Success. "Student Debt and the Class of 2018," Page 4.

  2. Earnest. "Check Rates."

  3. Ascent. "College Loans."

  4. Federal Student Aid. "Federal Interest Rates and Fees."