Bad Credit Student Loans With No Cosigner

The cost of a secondary education has increased substantially in recent years and it’s not showing any signs of slowing down any time soon. Despite the insistence of naysayers, however, college education remains an important part of success. Without getting some kind of education after high school, your chances of getting a good job or making a decent wage decrease dramatically.

Because of this, people keen on college must explore different funding options. Once they’ve checked both scholarships and grants, people turn to student loans. These can provide the funding that you need to cover the costs of college.

For the newcomer, these lending tools may seem confusing. Here are answers to some of the most common issues surrounding student loans and how they work.

Book in school environment

The Size of the Student Loan Industry

The student loan market is massive and keeps expanding each year. Part of this is fueled by the astronomic costs of college tuition and the growth of the number of people attending college. In 2011, there were over $100 billion in student loans issued over the course of the year. In 2014, outstanding student loans hit the $1 trillion mark. In 2019, they hovered at 1.5 trillion. After making an adjustment for inflation, college students are borrowing more than twice as much as they borrowed nearly two decades ago.

What does this mean for the student borrower? Big demand has made these (relatively) low-interest debts more accessible. If you want to study without paying for college out-of-pocket, student loans are definitely one of the options available. Understand, however, that this comes at a tremendous risk to your personal finances. Even if all goes well, you’ll still be diverting your money toward debt payment for much of your early career.

Many fear that there will be a student loan “bubble” like there was in the housing market and in the stock market. Huge and backed by the government, this market might be too big to fail. Controversy continues to hound student loans to this day.

During Bankruptcy

Man devastated by bankruptcy

When you file for bankruptcy, you can sometimes clear most of your outstanding debt. The type of bankruptcy that you file will determine what happens to your debt. If you file for a Chapter 13 bankruptcy, you begin a repayment program that is administered by the court. Your bankruptcy trustee will collect a payment from you each month and then pay your creditors for you. This option gives you the protection of the court, helping you avoid lawsuits from your creditors.

If you instead file for a Chapter 7 bankruptcy, you may have your debts discharged. This type of bankruptcy makes it possible for most of your consumer debt (credit cards, medical debts, store accounts) to be completely wiped out. This gives you the opportunity to get a financial fresh start. Your creditors must write off the debt and they cannot contact you to try to collect the debt at any point in the future.

Neither type of bankruptcy are easy solutions for student loans. It is theoretically possible to have all of your debts wiped out except for your student loans when you file for bankruptcy.

Discharge Through Undue Hardship

Although it is difficult to get your student loans discharged through a Chapter 7 bankruptcy, it is not impossible. In extreme cases, bankruptcy court does allow student loans to be discharged. To do so, however, you must prove that they keep you from enjoying even a minimum standard of living. At this point, these debts put an undue hardship on your life from a financial standpoint. You must also prove that you tried to repay the loans in good faith when you initially got them. If you took out the loans and then you filed bankruptcy after college, you would not be showing good faith. In that case, the bankruptcy court would probably make you keep the student loan debt. You also must show that your current circumstances will persist for the majority of the life of the loan. For instance, if you have a 30 year repayment period on your loans, you’ll need to show that your financial situation could not improve over the next 15 years.

So what exactly constitutes an undue hardship? There is no specific answer, but you should have a very difficult financial situation to qualify. For example, if you are 55 years old, work in a minimum wage job, and your expenses are $500 more per month than what you currently make, the court may determine that your debts are putting an unnecessary financial burden on you. Often, the court take steps to confirm that you’re at least trying to pay your bills. Unless you have a permanent disability, sitting at home unemployed will not win you any sympathy.

Automatic Stay

During the bankruptcy process, the court will issue an order of automatic stay. This means that creditors cannot try to contact you or collect from you during the proceedings. Even if the student loan debt remains in effect after the bankruptcy has been completed, you will have a period where you don’t have to pay. Once complete, however, you’ll have to resume your payments if they were not discharged. This period can provide some temporary relief, allowing you to evaluate your situation and settle your other debts. You may have enough money to make your student loan payments as required once they’re gone.

Ultimately, you should not plan on using bankruptcy to discharge student loan debts. It is difficult to predict what the bankruptcy court will decide in your favor. The decision to file for a Chapter 7 bankruptcy should instead be used to get rid of other debts; discharging student loans in the process is a welcome bonus.

Student Loans as an Option

Man carrying student loan sign

You might be reluctant to fund your bach degree or master’s with debt that could scuttle your life goals. While college loans can come in handy, they aren’t for everyone. If you are thinking about using student loans to pay for your college education, there are a few important factors that you’ll need to consider.

Alternatives to Student Loans

Before taking out a loan, see if you qualify for other funding options. It’ll be a waste of opportunity to go into debts for education you could have gotten for free.

As a rule, you should take all the grants and scholarships you can qualify for before borrowing money. See how much money you’ll receive from them. Are they enough to cover all your expenses? If you’re lucky, you get your education for free. Even if you don’t, you still reduce the amount of student loans you’ll need. This saves you money and lightens your future debt burdens.

Scholarships

Among these sources are scholarships. If you’ve had a high grade point average in high school and performed well on college placement tests like the ACT or SAT, you might be eligible for an academic scholarship. Most schools also offer scholarships for athletics and extracurricular activities like band and debate. Check out the websites of your schools of choice and see if they offer scholarships you qualify for.

In addition to scholarships from schools, you can also apply for those from private organizations. Most nonprofit organizations offer scholarships for students who meet specific qualifications. Other times, all you need is apply for the scholarship to be considered for it.

Government and Private Grants

Another source of funds are grants. These are sums of money you can receive from the federal government, state government, or private organization. As with scholarships, you don’t have to pay back the money from these programs either.

One of the most common is the Pell Grant, a federal grant that is issued based on financial need. When you apply for any kind of financial aid, you must complete the Free Application for Federal Student Aid (FAFSA). The government uses the financial information on this document to determine whether you need financial assistance. Once you receive the grant money, you can use it to pay for tuition, books, fees, and other costs associated with your education.

Some nonprofit organizations and private causes also provide grants to students. You need to apply for them and meet the qualifications that are set forth by the private organization. Learn about as many of these grants as you can and apply for those you think you qualify for. Many of them have a limited number of slots, so act quickly.

Financial Self-Assessment

When considering student loans, you should also look at your own financial situation. Are you comfortable with taking on debt to further your education? Many balk at the idea of getting into debts even for education. After all, you might not get a job right away. These debts can cause financial problems early in your career.

Always check if taking out a loan makes financial sense. You need to know if your future earnings can pay for the college debts. Determine what your average income will be with your college degree and what it would be without one. A loan might be a good idea if your degree makes a significant increase to your earning potential. This is the reason why people see student loans as “good debt.”

Likewise, examine the monthly payment for your student loans and compare it to your projected income. A student loan is worth taking if your income grows enough to more than cover its monthly payments. Getting a $500 increase in your salary means that you can afford a $300 monthly loan payment with cash to spare.

Ultimately, the decision to rely on student loans is a personal one. Examine your financial situation with care before borrowing money.

The Difference between Public and Private Lenders

Student curious about something

Student loans come in two types: public and private. The public (or federal) student loan is provided by the federal or state government. Most come from the Department Of Education’s Federal Direct Loan Program. Borrowers can sometimes qualify for state student loans in the states that offer them. These are backed by state government programs and have different terms for borrowers.

The other type, the private student loan, is issued by banks and other financial institutions. In the past, lenders could issue federal loans and make a small profit. Today, all the federal student loans come from the Direct Loan Program; other lenders can only issue private student loans.

Requirements

With a federal student loan, you get approved for the funding rather easily. The most important requirements are as follows:

  • You are a U.S. citizen or a legal resident alien
  • You don’t have any outstanding government debt.
  • You have a Social Security number (unless you are not a U.S. citizen)

As such, a lot of people can qualify for federal loans.

You must register with the Selective Service and maintain some level of academic progress while in school. You must use the money that you receive from the federal program to pay only for education expenses.

The government will also check if you have any outstanding debts. First, they examine if you defaulted on any prior student loans at the time of the application. They will also check to make sure that you don’t owe other debts to the government such as tax debts.

By comparison, private student loans are much harder to qualify for. The approval for this type of loan requires credit scores, income, and debt-to-income ratio. Moreover, borrowers must also get a cosigner to apply for the loan with them before approval approved.

If you’ve exhausted all of the federal student loan funds that you can get and still need money for college, don’t hesitate to apply for private student loans. The worst that could happen is that you would be denied the loan and you would have to look at other funding options for school.

Interest Rates

A key difference between federal student loans and private student loans are in interest rates. With private student loans, the interest rates are set by the market. Typically, the interest rates on these loans are much higher than those of public student loans.

Sometimes, federal student loan interest rates are also subsidized. This means you can get an even lower interest rate if your financial situation merits it. In addition, the government also pays for your interest until you finish school. You have the option of deferring the interest that is accumulating on your loan until after you graduate, lowering your debts in the process. If you don’t qualify for subsidized student loans and still defer your loan interest, this will simply be added onto the balance of your loans upon graduation.

The type of interest rate also differs between the two. With federal loans, the interest rates are typically fixed. This means that the interest rate locked over the life of your loan. This should provide you with some stability in your payment. On the other side of the spectrum, private student loans have variable interest rates. This means that the interest rate rises and falls based on market factors. They are usually pegged to the LIBOR index. Thus, a private student loan comes with its own risks. If interest rates go up significantly, you may end up with debt that you cannot afford to pay.

Repayment Plans

When it comes to repayment, there are key differences to be aware of as well.With the federal student loan, you can choose from one of many different repayment plans:

  • Straight repayment plan
  • Graduated repayment plan
  • Income-based repayment plan

This way, if you make less money right after college, you can get a lower monthly payment to work with. Private student loans do not always offer the same options. Their options vary from lender to lender.

If you are having trouble repaying your loans, federal student loans are a little easier to work with. If you lose your job or fall into financial hardship, you can get a deferment or forbearance. This will allow you to stop making payments for up to a few years until you can get back on your feet again. Not all private lenders offer similar options. You receive whatever the private lender provides, which may not be that much help.

The way these two types of loans handle defaults also varies. When you stop paying your federal student loans, it typically takes as long as nine months before you default. With a private student lender, the default time range is significantly shorter. In many cases, the lender will consider your account of the defaulted after just a month of missing a payment.

Be aware. Defaulting on your student loans is bad for your credit history.

Discharging Student Loans

If you have a private student loan and you become disabled, your lender may or may not let you off the hook. With federal loans, on the other hand, you can typically get them discharged by completing an application once you are disabled.

When working with private student loans, your debt may not even be discharged when you die. Often, the lender expects the cosigner to pay off the remainder of the balance. Since federal student loans don’t require cosigners, the debts are usually discharged upon the death of the borrower.

Comparing the Costs

It is typically advantageous to borrow the majority of your funds from federal student loans. If you have maxed out your loan amounts from federal loans and still need more money, then you can apply for private student loans to pick up the rest of the balance.

Keep in mind that you’ll need to meet the credit and income requirements of the private lender to get the money you need. You probably won’t be making much money while you’re in school. Thus, you must also look for someone to co-sign your loan.

Types of Federal Student Loans

Graduating piggybank with books and coins

There are a few different types of Federal Student Loans to choose from. These programs are available for undergraduate students:

  • Stafford loans
  • Perkins loans
  • PLUS loans

In theory, you could get approved for all three of these loan programs at some point. If you have a significant financial need, you could take out both Perkins and Stafford loans at once. Not long after, you could add a PLUS loan to help pay for graduate school. As a rule, you should draw the most funds from the program with best interest rate at the time.

Stafford and Perkins Loans

The most popular option, the Stafford loan is widely available for most students. Stafford loans can be subsidized. The government assesses your eligibility for subsidized Stafford loans based on information from your FAFSA.

If you qualify for subsidized Stafford loans, you might meet the requirements for Perkins loans as well. They come with lower interest rates than Stafford loans and are in part backed by the university you attend.

The collection process will be different for each of these loans when you fall behind your payments. With Stafford loans, you’ll start getting collection calls and have your wages garnished to pay back the debt. The government can also seize federal income tax refunds as payment for the debt. With Perkins loans, they will not garnish your paycheck or take your income tax refund for payment of the debt.

PLUS Loans

The PLUS loan program is meant for parents of college students and graduate students. If you’ve finished your bachelors degree and want to go back to college to get a master’s, you can also use the PLUS program to borrow money in your own name.

If you are a parent of a college student who can’t qualify for enough funds, you can help them fund their education with the help of a PLUS loan. You must have a child that is enrolled for at least half-time in an approved college or university to qualify for this program.

The drawback with the PLUS loan program is that there is no grace period for payments. You must start paying immediately after the funds have been distributed. If you’re in graduate school, on the other hand, you do have the option of deferring payments while you are enrolled at least half-time.

Completing the FAFSA

Newcomers might find the filing a FAFSA form arduous and confusing at first. You can get these forms from a high school guidance counselor’s office or online from the Department of Education’s website. Afterward, you’d need fill it out and gather the necessary documentation:

  • Valid ID
  • Your Social Security card
  • Social Security pay stubs
  • Your tax returns
  • Your financial statements.

If you are still a dependent, you will also need these documents for your parents. The form’s questions are designed to ascertain your financial situation and that of your parents.

If you are working with a paper application, you’ll need to mail it to the Department of Education. You don’t need to include copies of all of your financial records when you mail the document. You can also simply submit the application on the website.

Once you’ve sent the form, you’ll need to wait for the results. The Department of Education will review the documentation and then send you some information about what you qualify for.

Credit Ratings and Scores

People in line checking credit score

The qualifications for federal student loans are different from the loan approval process of commercial loans. The federal government doesn’t look at your credit score (or see if you have any credit history at all). The vast majority of people who want to go to college can be qualified for federal student loan.

When you apply for a private student loan, the lender is going to pull a copy of your credit report and examine your credit score. If you don’t have much of a credit history or credit accounts, it will be difficult to get approved for a private student loan without a cosigner. You may also find it hard to secure approval if you do not have a high enough source of income.

Lender will also look at your credit score to figure out your interest rate. As a rule, the borrowers who represent the biggest risk have to pay the highest interest rates. Lenders have to be compensated for the financial risks that they are taking on and charge a higher rate of interest helps do this. If you have a higher credit score, you should be able to get a lower interest rate from the private student loan lender.

Every private lender has its own standards when it comes to student loan approval. Some lenders are more strict than others. It is difficult to know whether you can get approved until you actually file.

Disbursement

You may be interested in how the logistics of the lending arrangement actually work. In most cases, the money from a federal student loan will go directly to the school. With Perkins loans, the Department of Education may send a part of the money and the rest of the money from the loan comes from the school itself.

The funds are usually disbursed to the school in two payments. The first payment usually occurs shortly after the semester begins. The second payment comes sometime in the winter. This way, the Department of Education can verify who is attending college.

If you borrow more money than what your tuition costs, you can use the rest to pay for other education expenses. How you can handle the extra money will depend on your school’s policy. Some schools will simply credit it to your account at the school and it can go toward any future expenses you incur. Others will give you the money right away—either cut you a check, give you cash, or transfer the money to your bank account. At that point, you are free to use the money however you want.

If you borrow money through a private student loan, the payment specifics can vary. In some cases, the lender will send the money directly to the school. However, since the loan is being taken out directly by you, many private lenders will send you the money. Then you can use the money to pay tuition or for any other education expenses that you incur along the way.

Cosigners

If you are afraid of taking on so much debt all by yourself, you may be interested in finding a cosigner to work with on the loan approval process.
Getting a cosigner with a good credit score and a high income improves your chances of getting approved and helps you get a lower interest rate on the loan. Many students rely on their parents, grandparents or other family members to cosign student loans with them.

The purpose of using cosigner is to improve your chances of getting approved for a loan based on your their superior credit profile. Their participation assures the bankers that someone secure can help pay the loan. They are especially useful when you have a poor or nonexistent credit history.

They are exclusive to private loans, which are issued by banks and credit unions. Federal student loans are issued directly from the Department of Education. These loans neither allow nor need a cosigner because they aren’t based on your credit at all.

Your cosigner must fill out information on your loan application. After the cosigner provides their personal information, the lender will pull a copy of their credit report and look at their income level. In some cases, the lender will need to verify that the cosigner is gainfully employed.

Lenders look at both your and your cosigner’s information together when determining whether your loan is approved. Every lender has its own specific lending standards and some are more strict than others.

The Benefits of a Cosigner

A cosigner could mean a world of difference for your loan application. They can help you receive the financial assistance necessary to go to college and boost your chances of earning. You may owe your financial future to the cooperation of your cosigner.

Cosigners also help you improve your chances of securing a good interest rate. When a lender looks at your application and credit profile, the interest rate that they choose is based on how risky the loan actually is. A cosigner mitigates the perceived risks of lending you money. By securing a lower interest rate, you save thousands of dollars on future interest payments. The lower interest also brings down your monthly payments, reducing the impact the loan has on your savings.

Understanding Cosigner Risks

Your cosigner should understand the risks involved signing the loan. If you don’t pay the loan back for any reason, the lender will come after your cosigner for payment. If you lose your job, become disabled, or pass on, the private student loan lender will expect your lender to pay for the debt.

Because of these financial risks, you need to ensure that your cosigner he understands the implications. Some lenders will explain the risks to the cosigner, while others may not. Only pick someone you can trust to be your cosigner. The cosigner’s risks are the product of standing behind you; you owe it to them to pay back your debts. If you don’t pay back the debt, it can negatively affect the cosigner on the loan.

What should you look for in a cosigner? First off, you should find someone who has a good credit history. A cosigner who filed for bankruptcy or has a low credit score will not do you any favors. An unreliable cosigner might make the interest rate higher than it needs to be. If you were declined a loan once, you might not have the luxury of being picky when selecting your cosigner. In that case, you must take whoever you can get.

Alternate Funding Options

Student baffled by questions

Even if you do qualify for federal student loans, they usually do not provide enough money per semester to pay all your education costs. They have a cap for each semester that you qualify. If you go to a school where tuition costs more than what federal loans will provide and you can’t get private loans, you may have to look at other financing options. Options like personal loans and credit cards seem attractive, but are they worth it?

Personal Loans

There is nothing wrong with using personal loans for college tuition if you can qualify for them. Many students already use them to cover for extra expenses. Their biggest drawback, however, comes in their interest rates. These are much higher than those you can get from student loans, which have some of the lowest rates in the world.

Another potential issue is that personal loans can be difficult to qualify for. There are two different types of personal loans that you can get: secured and unsecured. To qualify for a secured loan, you’ll need a form of collateral your lender can take if you don’t repay the debt. For instance, you might have to put up the equity of your home and vehicle to secure the loan. You’ll also need a good credit history and income within a specific bracket.

It is usually much more difficult to get approved for an unsecured loan than it is for a secured one. This is because it is harder for the lender to collect their money. If you default, the lender must take you to court.You do not have to put up any collateral, but you must prove that you are a low risk to the lender.

Lenders will exhaustively examine through your credit report to find any potential issues. They may also want to look at your bank statements to ensure that you have enough money in reserve to make your loan payments if something happens your income. The lender will want to verify your income amount and your employment situation.

As an alternative, you could also get a cosigner with a good credit score. Cosigners offload some of the risks to the lenders, which can improve your chances of getting approved.

Repayment terms are also not as favorable as what you can get with student loans. The lender usually gives you a fixed repayment schedule or base it on the fluctuating interest rate of your loan. This can make it very difficult to repay the loan when things go pear-shaped.

Credit Cards

Another option is financing through credit cards. The biggest advantage of this option is that it is easy to do. Almost anyone can get approved for a credit card. Moreover, these cards have no few restrictions on how they can be spent. You don’t have to fill out any more loan applications or worry about how much money you make to get approved for the financing. Instead, you just give the credit card number to your school’s bursar’s office.

Despite this, funding your education on plastic is not the best option. The interest rates alone are among the most punitive at more than 20 percent in some cases. When you apply those interest rates to $30,000 or $50,000 in education costs, you will end up paying an astronomic amount of money in interest. It could take you the rest of your life to pay off the debt if you only make the minimum payments on your credit card accounts.

One of the nice things about credit card use is that you could take advantage of rewards programs, which give you points for every dollar that you spend on the card. Some credit cards will give you double or triple points during promotions. This means that you could accumulate a very large points balance by paying for college with a credit card. You could use these points to pay for a free vacation, electronics for your dorm room, or even get gift certificates. While this isn’t a good enough reason to use credit cards to pay for your college, it comes as a nice bonus if you are planning on doing it anyway.

Other Options

If you don’t want to use a personal loan or a credit card to finance your education, there may be some other alternatives to consider.

Home Equity Loans

You may be able to take out a home-equity loan and use the money to pay for your college education. This can be a good option to consider if you are a homeowner and you have some equity in your house. One of the advantages of using a home-equity loan is you can deduct the interest that you pay on the loan from your taxable income. This reduces your tax burden for the year. If you were to use regular student loans, the Internal Revenue Service would allow you to deduct the interest that you pay on those loans as well. By getting a home-equity loan, you get to keep the ability to deduct the interest on your loan. With other methods of borrowing, you will not be able to deduct this interest.

You must have to have decent credit and a sufficient amount of income to pay for the home-equity loan payments. In addition, you will have to start making payments on the loan right away. This means that you’re going to have to work or get income from some other source while you are in college.

Life Insurance Policy Loans

Another option is getting money from a life insurance policy. If you have a whole life insurance policy, you could have some cash value accumulated. Most life insurance policies make it easy for you to borrow against this cash value by taking a policy loan.

The nice thing about using a life insurance policy loan is that you don’t have to worry about your credit or income. To qualify for this loan, you only have to fill out a form and the insurance company will send you the money. Another benefit of using this strategy is that the loans typically have very low interest rates. You also don’t have to make regular payments to the insurance company. You can pay a little bit at a time as long as you pay the money back within a certain amount of time.

Friends and Family

In some cases, you may be able to borrow the money from friends or family members. This is an attractive option because the terms will probably be flexible. You won’t have to worry about your credit score or income. If you use this option, try to make the loan agreement as formal as possible. Get it in writing and make sure that your friend or family member knows that you will pay them back.

Peer-to-Peer Lending

Some students with no other alternatives use peer-to-peer lending sites . Here, individuals who have extra money can lend it to others. The peer-to-peer site gauges the credit profile of the borrower and then provides general information to the lenders. Lenders on the network can choose to lend to individual borrowers. The site will take a regular payment from the borrower’s bank account and distribute it to their creditors.

Although there are plenty of alternative means of getting college funds, they may not always be in your best interest. Try to prioritize your borrowing by focusing on the lowest interest rate options first and then explore options with higher rates after that.

Work or Study? Weighing in on the Big Decision

Student burnt out from school

Graduating from high school is a big life milestone. From there, you might be unsure of where to go next. You’ll need to weigh in several factors to choose the best path for your adult life. Some people decide to take a year or two off to work. Others immediately enroll in college and start courses the next fall. When trying to decide between the two options, there are no right or wrong answers. You must examine the individual factors and make the best decision based on your needs. Here are a few things to consider.

Are You Burnt Out?

One thing you need to consider is whether you are ready to start taking classes again right away. Many people who have just finished high school are still burnt out by senior year. In this case, it might make sense to take a year or two off from school. When you go to college, you’ll likely be involved in the most intense studies of your life. If the thought of hitting the books hard right on the heels of graduating isn’t appealing, taking some time off can make some sense.

Do You Need Money?

If you do not have enough money set aside to pay for school or at least to cover some of your expenses, you may want to take a break and get a job. If you can keep your living expenses low by living at home for a few years and working, you could save enough money to help pay for your schooling. By doing this, you can prevent taking on a lot of debt and burdening yourself for the future.

Do You Know Why You’re Going to School?

You should also determine whether you know why you are actually going to go to college. Do you have a specific career in mind? Do you have a specific major that you want to go after?

You should not go to college just for the sake of going to college. If you just go to college because you don’t know what else to do, you’re going to accumulate debt for no reason. Once you get a few years into your college education, you might find out that you took the wrong classes and must start all over again.

It is usually better to take some time to think about what you want to accomplish. Then, you can specialize in a particular area instead of simply taking general education courses. In most cases, having a specialty degree is much more valuable in the job market.

Do You Have Other Plans?

If you take time away from school, you may be able to pursue some other opportunities that you cannot pursue later in life. You may not be married and you most likely won’t have any kids yet. You don’t have a mortgage or other debts make payments on. Because of this relative lack of responsibilities, you may want to explore the world or engage in some other activities. For instance, you might want to join the Peace Corps, go on a mission trip abroad, or work on a traveling crew that goes across the country. Your options are pretty much unlimited at this point and you might be interested in taking advantage of your lack of responsibility at this point.

Gaining Experience

Taking a year off to work can also provide you with an opportunity to get some real world experience. Many students who graduate from college find it difficult to get a job right after they get out. One of the reasons that many companies are not hiring college students is that they have no real world experience. These students have simply gone from kindergarten all the way through college without taking any time to work. You can boost your resume and show some real experience when you go to apply for a job after college.

Going Right to School

While taking time off to work and do other things is tempting, it may not necessarily be your best option. Many people who decide to take a year off after high school never get around to going to college. During that year off, they settle down, develop relationships, and progress in their jobs. Something always tends to come up that keeps them from applying for college and actually enrolling in classes. Because of this, it may be better for you to go straight into college so that you do not lose the momentum.

Another factor that you’ll have to consider is how easy it is to apply for colleges while you are in high school. Colleges provide information to high school guidance counselors to help students apply. High school students have plenty of resources to help with college financial aid, testing requirements, and more.

When you’re done with high school, you won’t have access to any of this information. While it is obviously still possible to apply for colleges, you would have an easier time getting in from high school.

Lowering the Costs of College Education

If you have questionable credit and cannot qualify for private student loans, you may be unsure of whether you can go to college. Don’t fret. There are still options available to get the education that you need. You may consider some alternatives to help you pay for your school.

One option is going to school on a part-time basis. Instead of going to school full-time, you may have to work and take classes at the same time. For example, instead of taking 15 hours per semester, you may want to take 6 hours per semester in the evenings while you work a job at the same time. You will spread out the amount of time that it takes to complete college but still be able to afford it. You can get set up on a tuition payment plan with your school so that you can make payments while you work. While you may not like the idea of having to put off your graduation, it may be one of the better options you have.

Community College

Another option that you may want to consider is going to community college. Many areas have community and junior colleges that offer high-quality educational courses. You can often get these classes for much cheaper prices than what you can get from regular colleges. For example, you might pay $300 per credit hour at a university and a community college might only charge $150 per credit hour.

When in community college, you might consider pursuing a two-year Associates degree instead of a four-year bachelor’s degree right off the bat. While this may not seem as attractive, it can work to your advantage. After you complete your Associates degree, you could use those credits to transfer to any four-year college that you want. This means that starting out at a community college might actually help you when it comes to transferring to a bigger school. During those two years, your financial situation might change and you could qualify for loans when you’re ready to take your bach degree.

Trade Schools

Besides community college, there are also several trade schools that you can attend at a cheaper rate. These schools can teach you the skills you need to go directly into a profession instead of general knowledge on various subjects. For example, you could take a one-year program to become a licensed practical nurse, a welder, or a mechanic. If you have considered a technical field such as this, you don’t necessarily need to go to a regular college and pay full price to gain this knowledge.

Online Degrees

If you are interested in saving money on a college education, you could also attend an online college. In today’s world, there are many different colleges and universities that are offering complete online degree programs. These are often cheaper than what you would have to pay for a regular college education. With advancements in technology, it is possible to get a near-identical learning experience online.

If you are thinking about pursuing a degree from an online college, make sure that you are working with a legitimate and accredited school. Several illegitimate schools take advantage of students and do not actually offer them any real training. Degrees from these mills will not hold any significance in the eyes of potential employers.

Saving on Books

One of the big expenses incurred by students in college are textbooks. Most college courses require you to buy or rent your textbook to complete the class. These text can cost students hundreds of dollars every semester. If you are short on funds, consider using an e-reader like Amazon Kindle. This way, you can rent all of your textbooks for a fraction of the price that you would normally pay. This can save you hundreds of dollars per semester on your book expenses.

In-State Tuition

Another way to save money on your college expenses is to attend a school in your home state. Most universities provide incentives and discounts for in-state students. It could save you thousands of dollars per semester on tuition alone. While you may not always like the idea of staying so close to home, you might save a bit of money if you did.

Avoid Making Changes

Many people who attend college change majors at least a few times and might want to transfer schools once or twice. Changing majors costs money. In addition, you may lose credits when you transfer, which may have you take the same classes over again. Try to stay the course as best as you can and it will save you a lot of money over the long-term.

Dual Credit

If you are still in high school, you may want to take advantage of dual credit courses. These courses actually give you credit for high school and college courses while taking just one class. These classes are cheaper since the college doesn’t have the overhead that comes with a normal class. The class is usually conducted entirely at your high school and it is taught by your high school teacher. If you still have some time to take high school classes, this can be a great way to save money.

Use Upromise

A relatively new way that you can save money on college is to use the Upromise. This is essentially a rewards program that gives you money to apply toward college expenses. Upromise gives you money back when you buy from its merchant partners, including local restaurants and grocery stores, online. You can even get other members of your family or friends to participate in the program for you. Each time someone makes a purchase, a part of that money will go toward your Upromise account. You can then decide what you want to do with the money.

You can put the money into a college savings plan to use for tuition, apply the money toward student loan balances, or get a check and pay the college directly. If you get enough people using Upromise, you’ll be able to accumulate quite a bit of money with the program. At any restaurants, you can get up to 8 percent back on your purchases. You can even get a Upromise credit card that will give you 19 percent cash back on purchases.

Tuition Reimbursement

Another option that you may look into is tuition reimbursement. Find an employer that offers this option and work for them for a certain period. Once you qualify for this program, your employer will actually pay for your college tuition as long as you are working toward a degree. Each program is different; some businesses have caps on how much you can spend on tuition. Through this approach, you’ll need to pay your bill and then provide your employer a receipt for reimbursement. With this option, you’ll need to work while in school, but it can be a good way to get your degree for free

Tax Advantages

Student loans may be expensive, but they can provide you with tax benefits. Your loan payments can reduce your taxable income and your tax liability through deductions.

When you pay student loans, part of your payment is the principal that you borrowed and some is interest. According to the Internal Revenue Service, you can deduct the interest amount of your payments every year. If you have a sizable loan amount, this can add up over the course of a year.

While some people are aware of the student loan interest deduction, many don’t realize that you can deduct the interest even if your parents are paying your student loan payments for you. The Internal Revenue Service views this scenario as if the parents were giving you a monetary gift and then you are using that money to pay your student loans. This means that your parents don’t get the tax deduction if you want to claim it for your own taxes.

The student loan interest deduction is known as an “above the line” deduction. This means that the deduction comes before the itemized deduction section of your tax return. This makes it possible for anyone who pays for student loan interest to deduct it from their taxes even if they don’t itemize their deductions. When you file your tax return, you have the option of taking a standard deduction based on your marital status or itemizing all of your individual deductions. Usually, those who can itemize their deductions get to take a bigger deduction overall. However, if you don’t have enough individual deductions to warrant itemizing, you can still take advantage of the student loan tax deduction.

How would you keep track of the interest and principal your student loan payment? You don’t need to. Your lender is required to send you a 1098-E form at the beginning of the following year. This form will list the amount of interest that you have paid over the course of the year.You will then take that exact amount and put it on your tax return in the appropriate section as a tax deduction.

Student Loan Consolidation Work

Consolidation of loans

It is common to accumulate many different student loans. Although you get all of your federal student loans from the Department of Education’s Direct Loan program, the loans are still serviced by different loan servicers. Thus, you might make several loan payments every month to satisfy your debt obligations. If this is a burden for you, you can apply to consolidate your loans in the direct student loan consolidation program.

With this program, you fill out an application, and the lender determines if you are eligible to consolidate. You should be able to get approved if you don’t have any late payments on your record. Once you consolidate your loans, you will be left with only one payment to make every month.

Another advantage of this offer is that you can gain access to alternative repayment plans. When you consolidate, the government offers several repayment plans that you can choose from to help you pay off your debts with ease. For example, you may be able to stretch the repayment term of your loans out to 30 years, which will give you a much lower monthly payment to work with. You can also choose to use a graduated repayment plan or the income-based repayment.

Consolidating Once

If you have federal student loans, you can only consolidate them one time. Once you have consolidated your debt into a single package, you won’t be able to do it again. You also will not be able to refinance the loans into a new loan package unless you use a personal loan. This means that you need to make sure that this is the right decision for you before moving forward with it.

Consolidating Private Loans

If you have a mixture of federal and private student loans, you may run into some problems when it comes to consolidating your debts. The problem with this scenario is that you cannot consolidate private and federal student loans together into the same package. These are administered by two completely different entities and they cannot be combined. This means that if you have both private loans and federal loans, you can consolidate into two different loan packages. You’ll have one loan for the private loan consolidation and another one for the federal loans. This will give you two monthly payments to work with, but it can still improve your situation if you are used to making multiple payments each month.

Private Loan Considerations

If you have several private student loans, consolidating them into can work to your advantage. You might save more on interest from refinancing a private loan. This is a worthwhile strategy when you have a cosigner on some of your existing student loans. When you refinance the loans into a new loan, you relieve your cosigner of any duties You do this by simply applying for the new loan in your name only. This can be a good way to protect your parents or family members who signed onto the loans with you.

Another advantage of consolidating your private student loans is that you may remove a variable interest rate. When you refinance your private student loans, you might lock in a low interest rate that will be fixed for the life of the repayment period.

Saving on Your Payment

When you consolidate your student loans, might save on your monthly payments. Some student loan lenders will provide you with incentives to sign up for an automatic monthly payment. In some cases, you might get an interest rate reduction between 0.25 and 0.5 percent. That may not seem like much on the surface, but it has the potential to save you a lot of money if you have a huge debt.

One other option to consider is income-based repayment after consolidation, a new repayment plan that has With this repayment plan, the government limits how much you can be required to pay based on how much money you earn. They cap your payment at a certain percentage of your income. This means that you will have to provide some kind of income verification so that they can come up with your monthly payment for you. This is an ideal solution for people who are working in low income industries and don’t have a lot of room for income growth.

Terms

When you consolidate student loans, you need understand the terms that are provided by the lender. For example, you should ask the lender if there are any pre-payment penalties associated with your student loan. On occasion, lenders will charge you a penalty for paying off your student loan early. This makes it impossible to refinance the debts into a personal loan or home equity loan in the future. It also makes it difficult to justify paying more on your loans.

At this point, you should also ask about about any fees that will be charged when you refinance. For instance, some lenders charge origination fees for setting up a new student loan for consolidation purposes. Although this fee may not be substantial, it could still cause trouble down the line and thus warrants investigation. These precautions can ensure that you aren’t being taken advantage of and prevent putting extra debt burdens on yourself.

If you are consolidating private student loans with a variable interest rate, learn what the maximum interest on the loan would be. In addition, determine how much your interest rate can fluctuate annual basis.

Some student loans come with annual interest rate caps so that your payment doesn’t rise too much from one year to the next. This gives you a more gradual progression for your payment if interest rates are rising.
Caps can protect you as a borrower from having to make a steep monthly payment if the interest rates go up too high.

Make sure you understand all the terms of your new loan agreement. If an item is unclear, do not hesitate to ask the lender to explain it to you. In addition, it might be wise to have the contract reviewed by someone you trust such, as a lawyer or banker. You are essentially agreeing to a contract that can last as long as a home mortgage. Thus, you need to comprehend everything in the agreement before you consent.

If you don’t feel comfortable with the terms, do not hesitate to walk away from the deal and shop around a little bit more. The same consolidation deal will still be available from the lender later on if you don’t find anything else to your linking.

Consolidating With Other Options

Although you cannot use federal programs to combine federal loans and private loans, you may combine the debt into a single source with another approach. If you take out a personal loan that is not affiliated with student loans anyway, you can pay off the private and federal student loans at the same time. You’ll just be left with the personal loan and you won’t have to worry about the restrictions on consolidating. For instance, if you own a home and you take out a home-equity loan, you can use the money from that to pay off all of your other debt. You’ll just be left with the home-equity loan payment at that point.

Even though it may be possible to combine all of your loans into a single account by taking out a personal loan, this may not be a good idea in practice. The typical interest rates of a personal loan or home equity loans are not quite as low those from student loans. Thus, you might pay more money on this debt over the long term in the name of convenience.

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18 Comments on “Bad Credit Student Loans With No Cosigner”

  1. Kaleigh Kelso wrote:

    My name is Kaleigh Kelso and I am a high school senior. I am very excited to graduate this May and going to college in the state of Missouri to study children’s psychology and elementary education. I have a strong passion for kids. I love to learn, read, and write; so I am very excited that my learning career is not ending after high school, but only beginning. Thank you for this oppurtunity.

  2. Rahimdad wrote:

    R/sir
    iam poor person please help me to give students loan,iam doing my m.phil degree,I have no source to contine my m.phil degree so please help me.my contact no is.03423016408 and my country is pakistan,I lived in province SINDH pakistan.

  3. Carrell Brady wrote:

    Hello my name is carrell Brady. I’m a African American male from Memphis Tennessee and I’m a pre law student who needs help paying for school. I have to prove my self to the school so I can become part of the Donaghey scholarship program my education is my life. Since my mother is a single parent as she ha to provide for 5 children she couldn’t finish school and her income is below 15,000 a year. My mother has bad credit and no one else feels comfortable with cosigning a loan for me. I really need help. I love school and want to get my degree.

  4. Dania Feliz wrote:

    Hello,
    I need a co-signer for a student loan. I am a sophomore in college. My degree is education and teacher. My credit score is fair.

    Thank you Dania

  5. katie phelps wrote:

    Hello. I have been trying to get a loan for college in just 4 days. I do not have a co-signer and I do not have any credit.

  6. Caitlin wrote:

    I really need a loan. I do not have any possibility of getting a cosigner and I have no credit. I desperately need a loan. At this point the interest rate does not matter

  7. Kristi Inzana wrote:

    I need help getting loans my total tuition is $67,982 and I got the glass and pell grant but it’s still not enough. And the loans they want me to do has a ton of interest. Can you please help and I don’t have a co signer either. Please please thank you.

  8. Douglas Chalwe wrote:

    please help me am a double orphan without relatives all have died may Almighty God speak to you so that you can considered me

  9. Selena Evans wrote:

    I have not credit history and no cosigner

  10. Melissa Sanders wrote:

    I need a student loan but I have bad credit

  11. Raymond Kidd wrote:

    I Raymond kidd trying to get a student loan to paid for my junior year please help me i don’t have any credit my mother credit score are fair please call me 205-335-9323. Thank you

  12. Azita wrote:

    Hi there
    Have you got any branch in Europe and which city?
    Regards
    Azita

  13. Joseph Park wrote:

    Give an actual example of a no credit check private loan.

  14. Torrie White wrote:

    Hello I’ve been trying to get a student loan my credit score is 549 I’ve lost my home and car . I have two children and I’m still trying to move forward with school but In need of a little push of assistance . Thank you .

  15. Allante Body wrote:

    Hello my name is Allante I am a college undergrad student. I have currently ran out of Financial aid at my school my major is Accounting. I have two more semesters until I graduate I would like to know if there are any grants that could help me reach my goal.

  16. KRISTOFER W BREWER wrote:

    please call me trying to loan for school I attending alabama stae college I an trying to deo summer classes and I have a balance

  17. Cynthia Muhonja wrote:

    HI
    I am a nursing student, and I am having a lot of trouble paying for school. I need a cosigner for sallie mae. If anyone can help me, please please assist. I will pay for the loan faithfully. I have fair credit. But it is not enough to get a loan. Please email me through seniorcitizensaides@mail.com (not gmail). Thank you

  18. Roshando L Manning wrote:

    Need help while I’m in school

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